Biden Administration proposal of more bank reporting to IRS.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The IRS can barely keep up now. How is it going to handle an enormous increase in the number of transactions to analyze?

It's not difficult at all to automate. Just total up the deposits and cross reference wth what's declared. They already do that with W's and 1099's. The IRS is capable of doing most of our returns for us right now. What they cant keep up with are the high value returns that claim a lot of expenses, deductions and depreciation that have to be double checked.

It's not hard but it is a massive storage and search problem. That's going to need equipment and people to maintain that equipment.

Data storage is super cheap nowadays. Bank accounts are already tied to our TIN/EIN. The system is already built. This would just be adding one more data point and the burden would fall on us as individuals to justify that income doesn't count, hence the complaints about burden.

What isn't cheap is the data security infrastructure. There have been IRS data breaches in the past and cybersecurity is a huge concern tha is expensive to address well.

Pretty much this. Data is cheap if you use the cloud. Do you want your banking records in the cloud, managed by the IRS? Remember how OPM failed to protect millions of employees records?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The IRS can barely keep up now. How is it going to handle an enormous increase in the number of transactions to analyze?

It's not difficult at all to automate. Just total up the deposits and cross reference wth what's declared. They already do that with W's and 1099's. The IRS is capable of doing most of our returns for us right now. What they cant keep up with are the high value returns that claim a lot of expenses, deductions and depreciation that have to be double checked.

It's not hard but it is a massive storage and search problem. That's going to need equipment and people to maintain that equipment.

Data storage is super cheap nowadays. Bank accounts are already tied to our TIN/EIN. The system is already built. This would just be adding one more data point and the burden would fall on us as individuals to justify that income doesn't count, hence the complaints about burden.

What isn't cheap is the data security infrastructure. There have been IRS data breaches in the past and cybersecurity is a huge concern tha is expensive to address well.

oh dear lord it’s just going to be another 1099 type report. It won’t list individual transactions. For the tenth time please read an actual article about this.

Pretty much this. Data is cheap if you use the cloud. Do you want your banking records in the cloud, managed by the IRS? Remember how OPM failed to protect millions of employees records?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The IRS can barely keep up now. How is it going to handle an enormous increase in the number of transactions to analyze?

It's not difficult at all to automate. Just total up the deposits and cross reference wth what's declared. They already do that with W's and 1099's. The IRS is capable of doing most of our returns for us right now. What they cant keep up with are the high value returns that claim a lot of expenses, deductions and depreciation that have to be double checked.

My husband and I have separate accounts. He auto transfers $250 into my account biweekly. Is that going to flag me as avoiding income tax? GMAFB.

Exactly, All of daily life will be deemed audit-worthy. Transfers within families, selling crap on craigslist, and all the examples others have given. This is a nightmare for average people. WHY DON'T THEY FOCUS ON THE JEFF BEZOS'S OF THE WORLD??? I truly don't understand.

Because with a socialistic society, The elites like Bezos - the rules don’t apply to them.

But we don’t live in a socialist society, we basically live in an oligarchy, brought to you by the dunks in the GOP.

The big parties are more alike than either of you admit. They like control when they have it, but buck around like a wild bronco when they don’t. Let’s look at the ones living in gated communities and spouses in banking and other big business. Seems that about now both major parties have similar supporters in corporate America though one may have the edge when it comes to major internet businesses. The reality is neither group as a good plan, but I would argue one has less than a great plan (usually none but a lot of hot air).

I’m done with everything being so binary in politics.

Wow. Both sides, eh?

Yes. I’m looking for a strong 3td party. Anyone married to either party is a fool.

[Anonymous]

All its going to have is:

Bank Acct XYZ
Tax Year: 2022
Total Deposits: $XXX.XX
Total Withdrawls: $XXX.XX


Big whoop.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is ludicrous. More evidence that the Democratic Party wants a surveillance state.
This alone should tell you that this bill has to fail. Bigly.

After the TX abortion law (and all the warrantless wiretapping) it is clear that the Republicans want one. If the Dems go down the same path we are screwed.

Oh, I guess I thought those were Democrats using the FBI for political purposes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Good God what a stupid, utterly asinine idea. The reporting will become a nightmare.

Imagine having to report to the IRS every single damn time you collect funds from your roomates to pay bills, collect money for a restaurant bill, collect money from a spouse, SO, bf/gf, or any myriad of minor bullshit from your daily life.

Go the hell away IRS and US govt.

Good god read the actual proposal before you post!! It won’t require you to do anything. Your bank will create an annual cash flow summary.

Except you might then have to prove that it's not income because your inflows won't match the declared amounts. Look, most of us are pretty sure that this provision does not have bad intent. However, the unintended outcomes are potentially enormous because of how often we all do little things like she's talking about. From a thousand feet it all looks like undeclared income.

If you earn 50,000 and collect 500,000 of funds from your roommates, then yes. If you make 50,000 and collect a few grand worth of bills, then no. This is really a matter of basic accounting ratios. Your cash flow should not be many multiples of your income.

Well duh. That's not the issue. We've all agreed that there are good intentions behind it. The issue is how in trying to get those scofflaws normal people get caught up in the dragnet. How can they make this tuna dolphin safe?

The fact remains that lots of normal things, like splitting a restaurant bill after the fact, would get caught up by the algorithm that does the first few layers of screening. That you all keep ignoring these very valid concerns is disconcerting.

[Anonymous]

The banking industry cannot stand this proposal. It would be a bookkeeping nightmare.

And, smaller banks would have trouble with the bookkeeping.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The IRS can barely keep up now. How is it going to handle an enormous increase in the number of transactions to analyze?

It's not difficult at all to automate. Just total up the deposits and cross reference wth what's declared. They already do that with W's and 1099's. The IRS is capable of doing most of our returns for us right now. What they cant keep up with are the high value returns that claim a lot of expenses, deductions and depreciation that have to be double checked.

My husband and I have separate accounts. He auto transfers $250 into my account biweekly. Is that going to flag me as avoiding income tax? GMAFB.

Exactly, All of daily life will be deemed audit-worthy. Transfers within families, selling crap on craigslist, and all the examples others have given. This is a nightmare for average people. WHY DON'T THEY FOCUS ON THE JEFF BEZOS'S OF THE WORLD??? I truly don't understand.

Because with a socialistic society, The elites like Bezos - the rules don’t apply to them.

But we don’t live in a socialist society, we basically live in an oligarchy, brought to you by the dunks in the GOP.

These kind of statements are just bizarre. Yep, we live in an oligarchy all right, but Democrats control: Big Tech, journalism, higher education, K-12 education, unions, large corporations (doubt this, check your email for BLM support letters), the intelligence community, the DOJ, the military, and of course all of the other federal agencies, most large cities.

Are there corporatist shills in the GOP who support the above? Yes, but they do not control American society.

[Anonymous]

Anonymous wrote:All its going to have is:

Bank Acct XYZ
Tax Year: 2022
Total Deposits: $XXX.XX
Total Withdrawls: $XXX.XX


Big whoop.

My question is more practical. How is this really going to help them? I assume they will try to compare the year over year change in balances to the income reported on your tax return. But there are so many legitimate reasons for changes that wouldn’t show on your return that it’s hard to see how this wouldn’t create tons of false positives. Gifts, tax free payments like pensions, house sales, insurance proceeds, etc. Plus transfers between accounts owned by the same people. Even if they somehow tried to zero those out, differences in titling of the accounts would undoubtedly mess this up a lot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:All its going to have is:

Bank Acct XYZ
Tax Year: 2022
Total Deposits: $XXX.XX
Total Withdrawls: $XXX.XX


Big whoop.

My question is more practical. How is this really going to help them? I assume they will try to compare the year over year change in balances to the income reported on your tax return. But there are so many legitimate reasons for changes that wouldn’t show on your return that it’s hard to see how this wouldn’t create tons of false positives. Gifts, tax free payments like pensions, house sales, insurance proceeds, etc. Plus transfers between accounts owned by the same people. Even if they somehow tried to zero those out, differences in titling of the accounts would undoubtedly mess this up a lot.

They aren't looking for a 30% discrepancy between your income and your cash flows. That is normal.

If you have a small business and receipts are double your reported income, or you take large deductions but there are no significant cash outflows, this will show up. If you create a partnership and don't file a tax return for it, that could mean that the partnership earned no income. But if your partnership's bank account shows significant inflows of cash, then the IRS will come knocking.

On the other hand, if you claim large losses on your business, today the IRS might audit you because it could be fraud. But if they can see your cash flows are highly negative, they can leave you alone, more confident that you are not cooking the books.

[Anonymous]

Anonymous wrote:The banking industry cannot stand this proposal. It would be a bookkeeping nightmare.

And, smaller banks would have trouble with the bookkeeping.

It is seriously not a bookkeeping error. Just like they run a 1099 for your account, they run a report that totals up all deposits and all withdrawals. it's super-simple.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The IRS can barely keep up now. How is it going to handle an enormous increase in the number of transactions to analyze?

It's not difficult at all to automate. Just total up the deposits and cross reference wth what's declared. They already do that with W's and 1099's. The IRS is capable of doing most of our returns for us right now. What they cant keep up with are the high value returns that claim a lot of expenses, deductions and depreciation that have to be double checked.

It's not hard but it is a massive storage and search problem. That's going to need equipment and people to maintain that equipment.

Data storage is super cheap nowadays. Bank accounts are already tied to our TIN/EIN. The system is already built. This would just be adding one more data point and the burden would fall on us as individuals to justify that income doesn't count, hence the complaints about burden.

What isn't cheap is the data security infrastructure. There have been IRS data breaches in the past and cybersecurity is a huge concern tha is expensive to address well.

Pretty much this. Data is cheap if you use the cloud. Do you want your banking records in the cloud, managed by the IRS? Remember how OPM failed to protect millions of employees records?

The IRS is not asking for a list of transactions. They are asking for annual account summaries. It's just two extra numbers on the 1099 forms they already produce.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Good God what a stupid, utterly asinine idea. The reporting will become a nightmare.

Imagine having to report to the IRS every single damn time you collect funds from your roomates to pay bills, collect money for a restaurant bill, collect money from a spouse, SO, bf/gf, or any myriad of minor bullshit from your daily life.

Go the hell away IRS and US govt.

Good god read the actual proposal before you post!! It won’t require you to do anything. Your bank will create an annual cash flow summary.

Bullshit.

Do you know what will happen when your bank has to hire additional staff to deal with this god awful mess? Say hello to more transaction fees. Can't wait until banks start charging us money to friggin deposit money into our accounts. People will be getting hit with 'compliance fees'.

As usual, the road to hell is paved with good intentions. And how do you verify crap that you sell? For example, I sell my video games and a dresser on craigslist and get $700. I sure as hell don't have receipts for it cause I'm just a dude selling crap.

This is less involved than producing your monthly bank statement. And nobody wants to track down your craigslist sales.

Sheesh, pull it together!

[Anonymous]

The Democrats are definitely wanting a surveillance state. This is ridiculous.

Sept 17 (Reuters) - The largest U.S. banking lobby groups banded together on Friday to make another push to kill a proposed bank account reporting law being drawn up as part of the congressional reconciliation package.

In a letter to U.S. House of Representatives Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, the lobby groups said the proposal would create "reputational challenges" for large financial services firms, increase the cost of tax preparations for Americans and small businesses, and create serious "financial privacy concerns".

"We urge members to oppose any efforts to advance this ill-advised new reporting regime," the groups said in the letter.

"While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population."

https://www.reuters.com/business/finance/us-banking-lobby-groups-oppose-proposed-tax-reporting-law-2021-09-17/

And, in other news:

[Anonymous]

Yeah, have fun reporting every single first communion, bar/bat mitzvah, a high school graduation, college graduation, wedding or even a birthday.