Biden administration proposal would require enhanced scrutiny of bank and investment accounts

Wouldnt that be the net, not the gross? Transferring $1,000 out, then transferring $1,000 in would result in gross flows of $2,000, and a net flow of $0.

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You’re right. I was thinking net flow. Gross flow makes the reporting virtually impossible to avoid outside of nearly dormant accounts.

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Seems like a lot of wasted time for people legitimately moving money around. I can imagine a dozen people looking at people who are simply chasing bank bonuses for example.

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This guy gets it.

Paul Merski, group executive vice president at the Independent Community Bankers of America (ICBA), which represents nearly 5,000 community banks in the United States.
”It’s a dragnet, it’s a collection of data in the scale that we’ve never seen before in the financial sector”
“Banks are already reporting billions of pieces of information and you’re getting to the point where the banks are becoming the police force for the IRS,” Merski said.
“I don’t think people, small business owners know about this profiling that the IRS wants to put together,” he added. “ it’s basically a profiling; they want to see your transactions and create a profile on you, and if they don’t like what they see, then they can go after you.”

Of course as a bank industry representative, he doesn’t want to be an unpaid snoop for the Feds doing all this new paperwork.

Now Biden’s administration won’t have to audit all those non-profits that contains “Patriot” in their name just to find out who their Domestic Extremist donors are. They can look at everything in your checking account and who you paid. Donations to the Wrong Causes will be Noted.

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I blame television The Feds are just jealous of all the financial information TV Cops seem to have at the tip of their fingers.

And I wonder how many “people” believe that the government already has this ability, also because of television?

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This is a little different in that they’d get your information before they suspect you of wrongdoing. I don’t think I’ve seen anything like that on TV, where they suspect you first, then get all your the information. And they do have this ability (to get your information once you’re a suspect) already IRL.

What matters is the information is available at a moment’s notice.

Going to the bank to get the info for a specific person, or the bank sending over all their information so it’s already available once you identify a specific person, is semantics :wink: .

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Not exactly, or at least not necessarily. He probably doesn’t want to be a snoop for the Feds, at all. However, adding these (favorite L word) DRACONIAN rules will add a much tougher hardship on small, local banks than on the major banks.

It’s almost as if the current administration is helping to force small banks out of business … or into the arms of larger banks, while at a disadvantage. I’m sure none of the larger banks put money into the outstretched arms of the big guy. They probably gave his kids, grand-kids, nieces, nephews etc. high paying, no-show jobs, who then kicked back 10% - 15% to the big guy.

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It’s not semantics, it’s the only thing that matters. If you have everyone’s data available, you can analyze it – filter and sort by some criteria to find suspects (tax dodgers, churners, MSers, etc). This is completely different from first finding a suspect by some other means, then getting and analyzing only their financial data (which is what I think cops on TV do).

It’s the difference between searching for something on google dot com, and having SQL access to the entire database that contains the answers.

Or said another way, it’s the difference between having 4th amendment rights to only being searched under court issued warrants with probable cause and living under totalitarian government.

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Jealousy does not distinguish between the two. I wasnt making a statement, I was following their logic and reasoning.

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For a bank rep, that seems more fear mongering than fact-based. I thought the proposal was clear about the report not capturing most transactions: " The annual return will report gross inflows and outflows with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner."

So transfers between your own accounts, use of cash (maybe hoping to catch criminal activity), and transfer to/from foreign accounts (for those hiding money off-shore). That’s quite a difference from the IRS profiling you based on who you donate to. Unless they are located off-shore.

Interestingly, it does not seem like the report will include transfers to a spouse or other family members.

If this is supposed to catch tax cheats, what is taxable about transferring money between accounts you are the owner of ?

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I’m not quite sure either. Maybe for money laundering or for transactions with off-shore accounts. They’ve just not made the case at all for how this extra reporting will help increase tax compliance and boost revenues, and how that would justify the invasion of privacy and burden of compliance for banks.

(Put this in the wrong place first time)

Looks like that $600 reporting thing may get raised.

Of course given everything over $10k is already reported, I’m not sure how much they think they can really “find out about those tax cheating billionaires” by looking at what they’re doing that only involves moving $1k or $5k instead of $10k or more. I stand by my earlier assessment that the point of this is selective IRS enforcement and privacy violation, nothing actually to do with collecting underpaid taxes.

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Here’s an old report from the IRS about the source of the tax gap for 2011-2013 tax years. It may help shed some light on how the increased bank account information could help with some of the under-reporting I think.

By category, the two largest tax gap sources according to the IRS appear to be underreported business income and non-business income of individuals, along with FICA and self-employment taxes.

I think this may be a strong hint and I could see where reporting of annual account balances could highlight discrepancies between reported income and changes in account balances that could be base for audit flagging.

If you look on page 14, they describe where the main sources of tax gap are occurring… It’s hard to argue against the correlation between the level of documentation of incomes and the level of underreporting.

I received an email from my (local) bank today explaining all this, warning me, and requesting I contact my member of Congress in an effort to stop it.

The bank is not happy about this at all. Their warning was quite stark.

Of course they’re not happy – it’s more work for them.

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Did they give any interesting reasons for being against it?

Nothing in particular. Just privacy.

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