It’s been announced that the IRS will now be tracing any transactions worth $600 or more, and many people are upset.
What does this mean for consumers?
The Credit Union National Association is asking the Joint Economic Committee leadership to look at the issues of this proposal.
If this proposal is approved, banks, credit unions, and other institutions will be required to report everything going in and out for their account holders.
These include details for cash, transfers between accounts for the same owner, and transactions with foreign accounts.
CUNA believes the proposal is burdensome to institutions and the IRS. They believe the amount of work necessary to complete these tasks make it riskier.
Some Legislators feel that the goal of the proposal is to fix the tax gap. Others find it incredibly invasive.
Can the IRS see the bank transaction they want to look at?
Treasury Secretary Janet Yellen says banks are not reporting details on transactions, but are simply adding two additional pieces of easily obtained information to forms they already fill out.
Managing Director of American University’s Kogod Tax Policy Center, professor Caroline Bruckner, has experience with tax policies.
She said that this proposal doesn’t even have legislative language, and information reporting proposals are difficult to get done.
The $600 dollar amount was chosen for a reason. Businesses must report when they pay an independent contractor $600 or more.
This proposal will target businesses that fail to report or underreport.
Get the latest headlines delivered to your inbox each morning? Sign up for our Morning Edition to start your day. FL1 on the Go! Download the free FingerLakes1.com App for Android (All Android Devices) or iOS (iPhone, iPad).