Biden Proposal Would Require Banks To Report Deposits To The IRS
The Biden administration is proposing a crackdown on unpaid taxes among wealthy Americans and businesses in order to raise revenue for its social spending bill.
Experts estimate the country loses $7 trillion yearly in unpaid taxes. In the Democrat’s new budget bill, President Joe Biden is asking banks to release new details on customers’ accounts to the Internal Revenue Service.
Biden wants banks to reveal data on accounts with total annual deposits or withdrawals totaling more than $600.
Many Republican lawmakers object to this proposal, calling it a major potential security breach. Though banks are already required to submit interest data to the IRS, this new proposal would require them to share information about account balances in order for the IRS to gauge if there are discrepancies between reported income and bank balances.
If implemented, Biden’s measure would affect over 100 million households and millions of businesses, potentially earning $460 billion in additional revenue for the state.
Treasury Secretary Janet Yellen commented on the proposal at a congressional hearing last month. “This is a very serious policy proposal,” she said. “We have a $7 trillion estimated tax gap that we have a great deal of tax avoidance by individuals and businesses — typically very high-net worth, high-income individuals and businesses that have opaque sources of income that are not paying the taxes that are due.”
Sen. Elizabeth Warren (D-Massachusetts) said this policy move might just make the economy a bit fairer. “The kinds of income that the I.R.S. has the least visibility into are the kinds of income that are overwhelmingly concentrated among the very richest taxpayers,” she said. “Strengthening information reporting, as well as providing protected and sustained I.R.S. funding, would ensure that we focus enforcement on the biggest fish.”