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Democrats increase the IRS ‘snooping’ account threshold from $600 to $10,000 – GOP says not enough

Democrats increase the IRS 'snooping' account threshold from $600 to $10,000 - GOP says not enough 2

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Senate Democrats came to an agreement on Tuesday to increase the threshold on their IRS ‘snooping’ plan from $600 to $10,000 in aggregate account flow, but Republicans said it would still invade the privacy of millions of Americans. 

Under the revised policy, accounts with $10,000 or more in total deposits and withdrawals, excluding wage income, would be subject to greater scrutiny. Banks would have to send over their aggregate inflow and outflow to the IRS to help the agency target its audits. 

The inflow would not take into account salary or wage income, which is already under the purview of the IRS under W-2 forms. It would also leave out income in the form of Social Security checks.

 

The narrowing in scope came after Republicans and banks put up fierce outcries over what they view to be an invasion of privacy. But such groups are not satisfied even with the revision. 

‘If they raise it to 10,000 it will still capture everybody, and every small business,’ Sen. Pat Toomey, R-Pa., said in a press conference on Tuesday. 

‘The average American runs over $61,000 through their account,’ said Sen. Mike Crapo, R-Idaho. 

‘The average American will be picked up by this plan.’ 

Crapo was not amused by the exemption for wage income, arguing most Americans would still be affected ‘unless they don’t spend their income.’ 

‘Whether the de minimis threshold is $600, $10,000 or even $100,000, it would capture the accounts of millions of consumers and small businesses,’ the Independent Community Bankers of America (ICBA) said in response. 

Banks already hand over information on transactions over $10,000 and any that they deem to be suspicious, to prevent money laundering. They also hand over data on interest that customer accounts accrue. 

Under the revised policy, accounts with $10,000 or more in total deposits and withdrawals, excluding wage income, would be subject to greater scrutiny. Banks would have to send over their aggregate inflow and outflow to the IRS to help the agency target its audits

Under the revised policy, accounts with $10,000 or more in total deposits and withdrawals, excluding wage income, would be subject to greater scrutiny. Banks would have to send over their aggregate inflow and outflow to the IRS to help the agency target its audits

Republicans compared Democrats' IRS proposal to policies under Communist china

Republicans compared Democrats’ IRS proposal to policies under Communist china 

‘If they’re not successfully catching the tax cheats with this, this is just assuming that everyone is a tax cheat,’ Paul Merski, executive vice president of congressional relations and strategy for ICBA, told DailyMail.com.

‘Whether it’s $600 or $10,000 under this proposal the intimate financial details’ of almost every American, said Sen. Bill Cassidy, R-La. 

‘What possibly could go wrong… President Xi would be proud.’   

Treasury Sec. Janet Yellen, who Cassidy said came up with the ‘squid-brained idea,’ has said that it will help the IRS to catch rich tax cheats. 

The Biden administration has insisted audit rates would not go up for those making under $400,000.  

‘She knows better than that. Why cast the net so wide? It’s not about policy, it’s not about taxes, it’s about control.’ 

Yellen said of the revised proposal:  ‘The core of the problem is a discrepancy  in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance.’ 

‘Today’s new policy reflects the administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,00 and providing an exemption for wage earners.’ 

This crackdown on unreported income is expected to generate $463 billion over the next decade, according to the Office of Tax Analysis. The money would be used to pay for Democrats’ budget reconciliation bill, currently valued at $3.5 trillion. 

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