IRS Wants to Monitor Your Bank Account

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So first let's talk about the facts and then I will share my opinion on the topic. Essentially the Biden administration submitted a proposal that would allow the IRS to review banking information for accounts with a balance of $600 or more or accounts with more than $600 of inflow or outflow transactions each year which would affect an overwhelming majority of bank accounts.

Now since then, the U.S. Treasury has amended this initial proposal raising the transaction threshold to $10,000 from the original $600 but again for your average household family, you probably have $10,000 coming in or out throughout the year meaning this would still impact a majority of bank accounts. However, this new proposal does clarify that wage and salary deposits such as your regular income would not count towards this threshold and states that banks can round total figures to the nearest $1000 instead of reporting exact numbers.

Okay so that's loosely what is being proposed but there are two major pieces of misinformation that I think is being widely misinterpreted. First of all, this is just a proposal and if you know anything about the US government then you probably know that they aren't exactly known for efficiently passing proposals. And as a proposal, this means that there is absolutely no change to the current written laws and therefore unless this were to actually get passed, the proposal means nothing and has absolutely no impact on our lives.

The second thing that I personally misunderstood when I first stumbled upon this is under the existing proposal, this would not allow the IRS to see every single piece of transactional data. Instead, they would only be seeing gross inflows and outflows which would be broken down into physical cash, transactions with foreign accounts, and transactions to or from another account from the same owner.

And the last thing I'll say is that this isn't changing or adding any kind of new tax and really, it's just aimed at enforcing the existing law and ensuring that the proper amount of taxes are being paid on all streams of income. So other than concerns about your privacy and security of your banking information which we’ll get to in a second, this isn't going to increase your taxes in any way assuming that you are already properly reporting all of your income streams and paying taxes on that income.

So for me personally and again this is just my opinion on the topic, something about submitting the total deposits and withdraws for my personal bank accounts to the IRS seems a little excessive. Add on top of that the fact that the IRS isn't exactly known for having the most secure system and has had a number of data breaches over the years and all in all it just seems like a bad idea. But I would love to know what your thoughts are on this proposal down in the comment section below and whether you think this is overbearing and will impact our privacy or if you think that this is necessary in order to collect taxes on those hidden income streams.

0:00-The IRS Wants to see Your BANK STATEMENT!
1:16-What Is Being Proposed?
2:19-Misinformation surrounding then
3:50-My OPINION on this
5:21-The MAIN Issue with This Proposal

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