Proposed IRS Bank Reporting Threshold Raised to $10K
Senior Democrats in Congress have agreed to make changes to their proposed tax reporting threshold for bank account inflows and outflows. An earlier proposal that put that threshold at $600, drew criticism for invasion of privacy and government overreach.
The White House has pledged to go after corporations and wealthy individuals who are not “paying their fair share” in taxes. Part of that plan was to monitor personal and business accounts with more than $600 of activity. According to the Treasury, the reports would allow auditors to identify discrepancies between declared income and actual deposits.
Now the White House will put forward a much more limited plan for the Internal Revenue Service, NY Times reports. Under the new plan, banks would only be required to provide data on accounts with total annual deposits or withdrawals worth more than $10,000. Additionally, the reporting requirement would not apply to payroll deposits for wage and salary earners or to beneficiaries of federal programs such as Social Security.
The administration has said the IRS will not monitor specific customer transactions but would instead use the bank account information to spot discrepancies. The change from $600 to $10,000 would exempt millions of Americans from the reporting requirement.