IRS Wants to Track All of Your Accounts
Treasury Department Seeks to Track Financial Transactions of Personal Bank Accounts Over $600
Quote:
“[T]his requirement would apply to all business and personal accounts from financial institutions,” the proposal reads, “including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600.”
In other words, financial institutions will report any flows in and out of business and personal accounts of more than $600.
This reporting requirement is far above any current requirements on financial institutions. As the document itself states, currently only information for certain types of revenue (including 1099 forms MISC, NEC, and K) require reporting.
This sounds a little too Big Brothery to me. I get the $10,000 transaction monitor, or whatever it is now. But any account you have - bank account, investment account, crypto account, PayPal, etc., that has $600 in it, which is nearly everyone in the country, the financial institution will be required to report all transactions of that account to the IRS.
Sounds like a search and seizure constitutional issue, no?
Re: IRS Wants to Track All of Your Accounts
It sounds like the exchanges that convert crypto to fiat are in the crosshairs here. Who's paying taxes on on the purchase of a cup of coffee with some altcoin? Nobody.
Who even understands crypto taxes? Try doing some queries on "the google" and it won't take long to see every tax person agrees there are taxes on crypto, but nobody knows how to do them.
Re: IRS Wants to Track All of Your Accounts
Quote:
Originally Posted by
tsptalk
Treasury Department Seeks to Track Financial Transactions of Personal Bank Accounts Over $600
Confused about the logic of this proposed legislation.
If the goal is to collect more revenue, aren't we already receiving a 1099 INT every end of year regardless of how pitiful our ending balance is?
What happens to the current BS/AML? Is $600 considered now the threshold for money laundering?
Am I understanding it correctly? If I deposit $600+ today, and withdraw $600+ tomorrow -and I do it multiple times, my money flow will be reported?
And what will they accomplish monitoring my account?
Maybe I am not fully understanding this proposed legislation.
Re: IRS Wants to Track All of Your Accounts
Maricar19,
I thought it was transactions >$600 but it appears they would get all the transactions on accounts >$600. They would get everything your all your bills, checks, debits, withdrawal & deposits
https://www.themainewire.com/2021/09...unts-over-600/
That's crazy, next they are going to want our credit card bills too.
Re: IRS Wants to Track All of Your Accounts
Quote:
Originally Posted by
Bullitt
It sounds like the exchanges that convert crypto to fiat are in the crosshairs here. Who's paying taxes on on the purchase of a cup of coffee with some altcoin? Nobody.
Who even understands crypto taxes? Try doing some queries on "the google" and it won't take long to see every tax person agrees there are taxes on crypto, but nobody knows how to do them.
You may be right. For Investments Crypto is treated as properly, like gold or stocks--you have ST or LT Capital Gains. Using it for retail purchases is an accident waiting to happen at tax time, but it shouldn't be too much different than someone trading a lot of stocks .
Re: IRS Wants to Track All of Your Accounts
https://cnsnews.com/blog/craig-banni...heir-customers
Quote:
"Banks already report directly to the IRS the interest that they pay on accounts when it exceeds $10, and this is not a proposal to provide detailed transaction level data by banks to the IRS," Yellen replied. "It is a proposal to add two additional pieces of easily ascertained information onto the 1099-INT form the banks already file," she said.
Yellen's statement doesn't add up, you would need an account much higher than $600 to earn $10 in interest at today's rates and many don't pay any interest. Yellen continues:
Quote:
“The IRS has a wealth of information about individuals. If you work at a job where you get legal income, a W-2 is filed. There are dividends payments and transactions payments that are sent to the government. But, there are a class of partnerships, businesses, high-income individuals who have opaque sources of income that the IRS doesn’t have direct information about.”
From earlier this year, https://www.politico.com/news/2021/0...g-boost-489830, they want to double the size of the IRS and spend $80M. I doubt they can find find $80M unless they focus on the politicians and political appointees in Washington D.C. which will never happen.
Re: IRS Wants to Track All of Your Accounts
Visa, Mastercard, etc, are selling your data all day long and most stuff is purchased through their networks. Not many people are using cash. Ever try? Unless you have exact change, you can't do it.
Remember the pushback in 2012 when IRS forced brokers to provide a 1099-B? It's now a hell of a lot easier to do taxes.
Somewhere packed away in the monstrous mess of an infrastructure bill are rules expanding the use of the term "Broker". I've always wondered why a monopoly like Coinbase wasn't required to do this in the first place so I don't have a problem with this. I'm sure they will going after all those overnight millionaires or "influencers" on twitter, instagram, and tiktok who rack up likes by showing off their bling.
It's going to be fun to watch when all those 20-30 year olds still living with mom and dad get popped with IRS notice that they owe $50,000+ in back taxes.
Quote:
The government needs to raise revenue to pay for its ginormous infrastructure bill—and it’s looking to take a bite out of the $2 trillion crypto industry to do so. The Joint Committee on Taxation, a Congressional tax authority, estimates that boosted crypto tax reporting requirements could raise $28 billion through 2031
https://fortune.com/2021/09/30/crypt...are-a-changin/
Re: IRS Wants to Track All of Your Accounts
Bullitt,
They were doing 1099-Bs prior to 2012. Now they are only reporting those assets that were purchased after a certain date in a sale. I agree that brokerages should be tracking the basis, which they should have been doing all along but with all the reorganizations and transfers of accounts from one to another, I'm guessing that some were not. If you sell a stock or fund bought in 2004, it is not reported to the IRS in Box 1e on the 1099-B Proceeds Summary.
.
Re: IRS Wants to Track All of Your Accounts
Looks like the $600 plan is dead. Still looking forward to what happens with crypto in 2022 with so many capital gains people didn't bother to pay capital gains for.
Quote:
Sens. Ron Wyden (D., Ore.) and Elizabeth Warren (D., Mass.) will detail an updated version of the tax-compliance plan on Tuesday that will include a $10,000 annual threshold before reports are required, according to prepared remarks from Mr. Wyden. That is an increase from the administration’s broader floor, which would include accounts with at least $600 in inflows, outflows or transactions.
https://www.wsj.com/articles/irs-ban...s-11634658560?
Re: IRS Wants to Track All of Your Accounts
For those using third-party transaction networks – like PayPal, Cash App and Venmo...the limit for reporting on 1099-K is lowered to $600 for 2022. See:
https://news.yahoo.com/paypal-venmo-...150046194.html & https://www.wgbh.org/news/national-n...r-payment-apps
