Biden proposal would allow IRS to track accounts with transactions over $600
WASHINGTON (WSET) — The Biden Administration's new proposal would have banks submit annual reports on any account with transactions or activity over $600 to the IRS, and lawmakers are divided.
"They shouldn't be in our personal lives looting around," said Republican Congressman Ben Cline.
Cline called this proposal the height of government invasiveness.
"These are law-abiding citizens who have done nothing wrong, so they shouldn't have the IRS in their backyards or bank accounts," Cline said.
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However, Democratic Senator Tim Kaine said this is just routine and focused on accountability.
"Banks have had reporting requirements for a long time, and it's to stop illicit behavior, to stop illegal behavior and make sure people are not evading taxes," Sen. Kaine said.
Kaine said the motives behind this proposal are for the good of taxpayers and believes the key is finding the right balance.
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However, local banks may not be ready for this change. Jimmy Davis, public relations director for Bank of the James, said if the proposal is approved, it will be a lot of extra work and will affect nearly 90% of accounts.
"Looks like it's going to be very ominous. It's gonna be cumbersome. We are definitely not set up to run those reports," said Davis.
Davis said community banks are smaller, so they will have to prepare for a big change like this, which could include hiring more people or buying more equipment.
If implemented, the proposed change would require banks to file annual reports on accounts that include gross inflow and gross outflow amounts.
Those amounts would need to be broken down into how much is coming into or out of an account in physical cash; to or from a foreign account; and to or from other accounts with the same owner.
If approved, this proposal would not go into effect until after Dec. 31, 2022.
Learn more about Biden's Tax Plan by visiting the White House website.
