Yellen says Democrats raise proposed IRS bank reporting threshold to $10,000

[Jose Garcia]

Source: Reuters

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen said on Tuesday she welcomed a revised proposal from congressional Democrats to raise a bank account tax reporting threshold to $10,000 in annual transactions from a proposed $600 level, with an exemption for wage earners.

The change was made after major opposition https://www.reuters.com/business/finance/us-banking-lobby-groups-oppose-proposed-tax-reporting-law-2021-09-17 from banking and other lobbying groups who charged that initial proposal would raise financial privacy concerns by requiring financial firms to track and submit to the Internal Revenue Service data on aggregate inflows and outflows from every bank account above a minimum threshold of $600 a year.

The Treasury has argued that the proposal, part of President Joe Biden's massive "reconciliation" social spending and tax hike package, would not track individual transactions but was aimed at making it harder for wealthy Americans to hide sources of income from taxation, allowing the IRS to target them for audits.

The Treasury estimates that the cost of tax evasion among the top 1% of taxpayers exceeds $160 billion annually, part of a "tax gap" between taxes owed and those collected estimated at more than $7 trillion over a decade.

Read more: https://www.google.com/amp/s/news.yahoo.com/amphtml/u-treasurys-yellen-says-democrats-160733714.html

[LittleGirl]

1. It's been that level for years

It’s exactly how it is, so no change at all, really.

[jimfields33]

2. True. Seems like they should drop it completely

If they want to add more agents that’d be fine in the bill. But they don’t need to add unnecessary items.

[FBaggins]

6. Not quite

The current reporting requirement is for $10k+ in cash in a given day.

That's a very small proportion of transactions above that amount in general.

And, of course, that reporting doesn't generally go to the IRS.

[LittleGirl]

7. All transactions over 10 k trigger notifications

I live abroad. Try buying a house with less than 10k being triggered.
Or getting a paycheck that size…monthly.

Been there done that.

[FBaggins]

8. Untrue

I live abroad.

That may explain your perspective. There are probably different rules international transactions.

But the $10k reporting requirement in the US is for cash transactions. There are lower limits for cash purchases of financial instruments (e.g., a cashier's check) or for suspicious transactions. But not for transactions in general.

https://www.occ.treas.gov/topics/supervision-and-examination/bsa/index-bsa.html

On edit - Yep... there is a $10k figure for international transactions in BSA.

[Fiendish Thingy]

9. No I think it's currently any single $10k transaction must be reported

This rule affects accounts with a total annual transactions of $10k or more, a big difference.

So if you get a monthly $1000 pay check direct deposited, you qualify, whereas before you wouldn’t.

[LittleGirl]

16. Typo?

1,000 vs 10,000 ? Just curious

[Fiendish Thingy]

18. No, that's my point- $1000/mo equals $12,000/yr, breaking the $10k annual threshold.

As opposed to the current trigger of $10k in any *single* transaction

[LittleGirl]

19. Oh ok. I thought any transaction over 10k gets triggered. eom

[Fiendish Thingy]

21. That's the current law- new law proposed is $10k deposit/withdrawals in a year. Nt

[brush]

22. 10k was what was thought by most but in actuality...

the actual amount at which banks reported was $6,500. I've never heard of it being as low as $600. That's not practical at all as transactions over six hundred dollars must run in the millions daily.

[drexelkathy]

3. Is that any change from

current numbers?

[catsudon]

15. yep

right now today, if you hit 10,000$ in one transaction, you're flagged.

wiith this proposal, it is $10,000 total in annual transactions.... which probaly applies to everyone that i know personally who have jobs.

[Historic NY]

4. The simplest solution is to do the automatic audits, the loser rants about on the 1%

Make them automatic triggers. That ought to fire them up .

[RussBLib]

5. more good news

and common sense too!

[OneCrazyDiamond]

10. I liked the $600 transaction reporting, but

if $10,000 in annual transactions sales it, I am on board. This country has too many people not paying their part.

[FBaggins]

11. The higher limit comes closer to supporting the claimed justification

It's obviously an invasion of citizens privacy... which might be justified by a claimed under-reporting of incomes. But it doesn't make sense to say that you're going after billionaires and try to find them with $600 transactions.

$100k or even multiples of that wouldn't be too high if that's really your target demographic.

[OneCrazyDiamond]

12. I never thought they were after billionaires.

I was thinking of drug dealers, unlicensed contractors, backyard mechanics, and shady landlords.

Billionaires buy loopholes from the QOP. The answer to that is vote Democratic.

[bucolic_frolic]

13. I think this proposal is ridiculous, a ruse to appear to be doing something while doing nothing

Banks already track 10k, and raise eyebrows at cash over $500. If they're only using size as criteria for higher scrutiny, they're missing the point. I'm sure there is plenty of money moving in large sums via checks or ACH or Bitcoin or the dark web that appears to be normal or business payments or transfers, but is really taxable interest, dividends, or capital gains, or pre-inheritance transfers. What they're proposing isn't scrutiny. It's a bandaid on a centerfold.

[catsudon]

14. this is still horrendous

and a waste of money since $10,000 in annual transactions would pretty much applies to everyone who uses a bank!

the Federal poverty level is $12,880 for a person. so i think they need to add another zero.

[Sapient Donkey]

20. This says it doesn't count earning from wages and salary.

I don’t really know how billionaires do things, so I don’t know how effective this will be against them. However, I do see how this gets people who are self-employed business owners or contractors who may not have their stuff reported by the person paying them.

[twodogsbarking]

17. I hope this clears things up for everyone.

[JustABozoOnThisBus]

23. LOL. Looking at the range of responses, I'd say "no clarity yet".

But whatever it means, 10,000 is better than 600.