President Biden Seeks to Track Your Bank Transactions
President Biden announced the American Families Plan, which is designed to, as defined by the Biden Administration, grow the middle class and expand benefits of economic growth to all Americans. Although some of the benefits proposed by the plan may seem admirable, paying for the free education, child tax credits, and expanded welfare programs is a chore, and focusing on tax evaders is built into the proposal.
Simply put, the American Families Plan calls for banks and other financial institutions to report more than just a taxpayer’s interest earned, capital gains and losses. Banks and other financial institutions would also be required to report “aggregate account outflows and inflows.” In other words, the IRS will know about all of your bank accounts, whether you earned income on that account or not, how much is in the account in a given year, and how much was transferred in and out of the account. It is unclear how this would work, but what is clear is that this new reporting obligation will create a massive compliance effort on the part of financial institutions, and eliminate a massive blind-spot that the IRS is currently enduring.
As things stand today, most taxpayers don’t have an obligation to report how much money they have in their bank accounts, how much they deposited, or how much they withdrew. Self-employed taxpayers who - like all Americans - self-report their income and deductions to the IRS are on the honor system. W-2 Wage earners, on the other hand, have their amount of wages reported to the IRS on their behalf. Regardless, KCA believes it is important to inform our members that Congress is considering requiring financial institutions to report detailed information on customer bank accounts to the IRS. This raises serious questions about your right to privacy. We encourage you to contact your member of Congress and let them know you oppose this proposal: https://bit.ly/3tCM7v6