WASHINGTON, Oct 19 : Reuters - Federal Treasury Secretary Janet Yellen welcomed a revised proposal from congressional Democrats on Tuesday to raise a proposed tax reporting threshold for annual transactions with an exemption for wage earners to $10,000 at current level.
com financial services us-banking - lobby-groups - oppose-planned 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 data to the Internal Revenue Service 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 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.
Today s new proposal reflects the Administration s strong belief that we should zero in on those at the top of the income scale who don t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters, Yellen said in a statement.
In a new statement of tax compliance proposals, https: home.treasury.gov. gov news press-releases jy 0415, the Treasury said financial accounts with dollars flowing in and out that totals less than $10,000 annually are not subject to any additional reporting.
Further, when computing this threshold, the new, tailored proposal carves out wage and salary earners and federal program beneficiaries, such that only those accruing other forms of income in opaque ways are part of the reporting regime, Treasury said.
The department also said that banks could report the total aggregate inflows and outflows from accounts rounded to the nearest $1,000 to further protect data privacy.
Yellen said she would continue to work with leaders in Congress to put out the IRS financial reporting requirement.
Spokespersons for Senate Ways and Means Committee Chairman Ron Wyden and House Finance Committee Chairman Richard Neal could not immediately be reached for comment on the revised proposal.