Democratic lawmakers have said they plan to raise the threshold of President Joe Biden’s radical proposal that all bank transactions of more than $600 be reported to the Internal Revenue Service (IRS).
The new reporting requirement would take effect in 2022 and would apply to both private individual and commercial business accounts owned by a taxpayer.
But House Ways and Means Committee Chairman Richard Neal (D-Mass.) said on Sept. 23 that he and other Democratic leaders are planning to scrap the $600 annual figure and set a higher threshold, of which the details are still being worked through.
Under the Bank Secrecy Act, U.S. financial institutions are currently mandated to report to the government all wire transfers over $10,000, as well as suspicious cash transactions, to prevent criminal activities such as money laundering.
However, Biden and Democratic allies in Congress claim the threshold needs to be lowered to close the “tax gap,” which is the difference between what current federal law requires to be collected by the government and how much actually goes into the Treasury.
The president has maintained that the new reporting rule will mean “the wealthy can no longer hide what they’re making and they can finally begin to pay their fair share of what they owe.”
At that same conference, the president noted that 55 of the biggest and most profitable corporations in America paid no federal income taxes in 2020, on what amounted to $40 billion in profit.
“That’s not right. And my economic plan will change that. Not punish anybody, just make them pay their fair share,” he said.
“This proposal would create significant operational and reputational challenges for financial institutions, increase tax preparation costs for individuals and small businesses, and create serious financial privacy concerns,” the group wrote. “We urge members to oppose any efforts to advance this ill-advised new reporting regime.”
Sen. John Boozman (R-Ark.) told The Epoch Times on Sept. 23 that the move would effectively “weaponize the IRS” and said he believes the Biden administration’s unprecedented rise in federal spending is the motivation behind expanding the IRS’s powers.
“What they’ve done is, they are weaponizing the IRS, they’re pushing many, many billions of dollars into that and they will be hiring tens of thousands of new agents,” Boozman said. "So this is all about looking at everybody’s transactions and then hoping that perhaps they find something that’s not getting reported so they can come after you and get that income.
“They want this new authority to look at transactions of $600 or more rather than $10,000 or more because they have a $3.5 trillion, or some say up to a $5 trillion bill, depending on how you score it, so they desperately need pay-fors. This shows how desperate they are.”
