IRS Bank reporting requirement could increase taxes for working class
A provision is being proposed as part of the $ 3.5 trillion Rebuild Better spending program that has the potential to change the rules for all banks and credit unions.
Additionally, the proposed provision could potentially increase the amount of income taxes paid by the majority of all account holders, according to John Heasley, vice president of federal affairs for the Texas Bankers Association.
“They [Congress] believe that there is a large percentage of individuals who are not paying their fair share of taxes, “Heasley told KTSM,” The rhetoric is that they are targeting millionaires and yet the proposal would bring that [new taxation] to potentially 80-90% of account holders right now.
The IRS measure would require banks and credit unions to report to the IRS accounts that have more than $ 600 a year in total deposits or withdrawals. Heasley said the provision did not fit the ‘tax the rich’ message pushed by the Biden administration,
âThey have a very ambitious spending program in the Build Back Better initiative which is being pushed by the Biden administration,â said Heasley, âThe reason they are doing it is they think it can generate $ 160 billion. extra dollars in extra funding for the government through the IRS It’s more than taxing millionaires, it’s a new revenue stream.
Heasley added that this new provision applies to everyone, including the working class and the middle class, saying:
âWhat this language says is that if even if you earn $ 25 per month with or out of your account, you might qualify for the report of that. This would therefore cover millions of accounts across the country. “
Last week, House Speaker Nancy Pelosi doubled down on her intention to keep the provision in the spending package during her weekly press conference,
âI understand there are concerns, but if people are breaking the law and not paying their taxes, one way to track them is the banking measure,â Pelosi said.
The Texas Bankers Association, as well as many who spoke to KTSM, said they were also concerned about the privacy issue of the IRS having more access to their bank information.
“We strongly believe that this is a violation of your [4th amendment ] rights as a customer. You have a reasonable expectation of confidentiality on your bank account, “Heasley asserted,” This proposal would require the IRS to look at your aggregate in and out and be able to compare that to your deposit. “
Bob Pena, a resident of El Paso, said he believed it was a privacy breach,
“It’s absurd, what a person does with their own money after paying their taxes is our business.”
Another El Paso resident agreed, saying:
“I totally agree that this is a way for the government to monitor the way you conduct your business, which I don’t approve of, because unless you say you go to another country and whether you have an excessive amount of money or anything else that is considered suspicious, then they really have no reason to investigate you for it.
Some residents told KTSM they believed the plan would backfire,
âThis is a strange bill. I think it’s probably going to hurt the IRS more than anything else because now I’m not going to deposit money in my bank. I think the government benefits people in many ways. I would say that is wrong. I wouldn’t vote for it.
Additionally, Heasley said the government will add thousands of new IRS employees to get the data they want.
âThey want that data, they’re going to put a system in place, and besides, they’re hiring thousands of additional employees to do the analysis. More than likely, they will set up some artificial intelligence or an algorithm to monitor individual accounts and compare them to what deposits are. “
Pena doesn’t understand why the government would want to expand the Internal Revenue Service or their oversight,
âNow the big government is trying to get this. There is no reason for this other than a bigger bureaucracy. He [President Biden] talks about doubling the size of the IRS. As it is, people have to worry about the IRS. What is it coming from? There is no reason for this.
Heasly calls on citizens to get involved and contact their elected officials,
“We want the typical El Pasoan to engage on this issue because we think it is overbreadth and I think many citizens would call it overbreadth as well.”
Heasley recommends going to https://www.texasbankers.com/Search?SearchTerms=grassroots for information on how to get in touch with your local lawmaker.
According to reports, due to the backlash received, a revised version of the proposal is expected to be announced that would require banks to report total annual deposits or withdrawals worth more than $ 10,000, rather than the threshold of 600. $.