This week marked a hot button discussion about a reported plan by the IRS and the Biden White House to essentially order mobile payment apps to turn over reports about users who transact more than $600. Of course with all things America, this has caused significant misinformation to spread online. Thus despite the misinformation this does not make it okay for the government to further reach into your pockets instead of properly tax the billionaire secretly living next door.
The new rules appear to be taking flight in January so long as Congress fully approves the measure (that part is unclear if they actually will.)
Before we begin, we’d like to point out one of the already common misconceptions we’ve noticed floating around social media. According to the proposal that begins in January, transactions that could be deemed or flagged as potential income are the ones the American government is coming for. The transactions they’re not coming for: loaning your friend $20 for Dominos, receiving or sending a rent payment, and other things like that.
Some things that would trigger reporting to the IRS and a year end form:
- Paychecks
- Items or receivables that could be classified as income (except rent payments and things of that nature because well they’re already reported anyway.)
- *ALL* Accounts that are holding more than $600 at any given time would automatically be forwarded to the IRS. Trade associations and banking heads are furious over the move as it is expected to cause a ton of customers to flee for the hills. This is not an indication of anyone committing a crime, though, most aren’t comfortable with private purchases being shown to the government at almost any given time.
Let’s be clear here this is coming from a government that in essence has dubious data collection and data privacy practices at best. The American government has never been great at such practices and should not be given the authority to dive deeper into bank accounts because of such.
But say if you’re suddenly receiving consistent payments from a business or what appears to be such then you’re likely to get a very rude awakening from the IRS come audit time. The move in part is as ass backwards as one would expect considering America’s tax troubles could be fixed by simply taxing the rich.
Of course and then there’s Treasury Secretary Janet Yellen who claims that the move will help fill the tax gap of about $7T that the government feels is owed to them. The problem with those comments made by Yellen is that she in almost zero fashion addresses the enormous tax evasion efforts by the super-wealthy as exposed time and time again (i.e the Panama Papers; the Pandora Papers and so on.)
For a full rundown of what would be expected come the new year click here.
We urge you to contact your representatives and members of Congress and demand this action not go through. Banks are even calling out the government over the fact that not long ago the IRS suffered a data breach of its own but wants even more data from modern Americans. #Saynototheoverreach
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