The Biden administration has backed down on a controversial proposal to direct the IRS to collect additional data on every bank account that sees more than $600 in annual transactions.
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The IRS would collect the total sum of deposits and withdrawals from bank accounts with more than $10,000 in non-payroll income. Information on individual transactions would not be collected."In response to considerations about scope, it [Congress] has crafted a new approach to include an exemption for wage and salary earners and federal program beneficiaries. Under this revised approach, such earners can be completely carved out of the reporting structure.
"Today’s new proposal 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 $10,000 and providing an exemption for wage earners like teachers and firefighters," Yellen said.
Senate Finance Committee Chairman Ron Wyden D-Ore., who spearheaded the effort to revise the proposal, dispute Republican claims that the goal is to snoop on Americans' financial transactions. The administration did not specify if the changes will impact the additional tax revenue they might be able to collect through enforcement. The administration has estimated improved tax enforcement could net up to $600 billion in additional tax revenue over the next decade.
Sen. Mike Crapo, R-Idaho, cited President Biden's commitment not to raise taxes on any American making less than $400,000, suggesting that threshold ought to be applied to IRS reporting.
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