Outraged citizens and banks alike want to know why President Joe Biden plans to allow the IRS to snoop into bank accounts, Venmo, PayPal, and crypto transactions, among other types of payment processing accounts.
The White House, said, “This type of surveillance is needed to prevent tax evasion.”
Biden plans to use any money that is confiscated during IRS audits to fund his proposed plan for the Democrats’ $3.5 trillion budget plan.
If passed, banks would be required to report every deposit and withdrawal from an account to the IRS in order to target audits.
The bill, known as Senate Bill 1788, the “Restoring the IRS Act of 2021,” was proposed by Senator Elizabeth Warren. Warren said the bill was intended to target the rich, however, tax experts say the bill does nothing of the sort and leaves those in congress exempt.
The plan targets the self-employed middle class who self-report their income and deductions.
Many who are self-employed are paid by 1099 and file taxes on a form 1040 with a Schedule C.
Banking officials are against the plan and say it violates the Fourth Amendment, which protects U.S. citizens from search and seizure without probable cause.
Patrick Hedger, vice president of policy at the Taxpayers’ Protection Alliance in Washington, said, “You’re going to push more folks into small cash transactions, you’re going to push more offshore banking — the big fish out there that do have sizable assets that are eligible for taxation offshore.”
According to White House officials, the “plan would prevent tax evasion and the IRS would know how much money is in an individual’s bank account in a given year, and exactly how much is going in and out.”
Currently, U.S banks are only required to report deposits of $10,000 or more to the IRS.
Each individual is required to pay taxes on income of $600.00 or more.
Starting in 2022, after being ordered by the IRS to change its earnings reporting policy, PayPal will be required to report gross payments received for sellers who receive over $20,000 in gross payment volume and over 200 separate payments in a calendar year.
The Biden administration wants companies like PayPal to lower earnings amounts that are reported even further.
Biden wants to know anytime $600 in gross payment volume from sales of goods or services in a single calendar year, regardless of the number of transactions, hits a person’s bank account. This includes sales made over Facebook.
PayPal and similar payment processing platforms are largely used by small businesses and independent sellers.
In response to the government intrusion, FNB National Bank, wrote, “As your community bank, we want our customers to know the facts, especially when it relates to concerning developments around public policy that exposes your financial privacy.
The Biden administration has proposed requiring all community banks and other financial institutions to report to the IRS on all deposits and withdrawals through business and personal accounts worth more than $600 regardless of tax liability. This indiscriminate, comprehensive bank account reporting to the IRS can soon be enacted in Congress and will create an unacceptable invasion of privacy for our customers. We work for our customers and our community, not the IRS.”
The bank is asking the public to join them in telling Congress that proposed IRS bank account profiling is intrusive and indiscriminate for all customers: If you want to make your voice heard, you can follow this link. https://www.icba.org/bank-locally/consumer-alert-from-icba
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