The average U.S. citizen wants to know why President Joe Biden plans to allow the IRS to snoop into bank accounts, Venmo, PayPal and crypto transactions, among other things.
The Biden administration says this type of surveillance is needed to prevent tax evasion. A key pillar of Biden’s proposed plan to pay for the Democrats’ $3.5 trillion budget plan is to monitor money going in and out of individuals’ bank accounts, Daily Mail reported.
Under Biden’s proposal, banks would be required to report to the IRS every deposit and withdrawal from an account in order to target audits. The plan would most mainly affect the self-employed who self-report their income and deductions. The wealthy could also be targeted.
Banks are opposed to the proposal, saying it would require too much work for too little return.
Other critics of the proposal complain it could violate the Fourth Amendment, which protects U.S. citizens from search and seizure without probable cause. It could victimize poorer taxpayers who can’t afford to fight tax audits or move their money into offshore accounts, said Patrick Hedger, vice president of policy at the Taxpayers’ Protection Alliance, a nonprofit advocacy and watchdog group based in Washington, D.C. that monitors federal spending and taxation.
“You’re going to end up punishing the worst off among us … the lower-income folks in this country have historically been the targets of aggressive IRS audits because they don’t have the CPAs and the lawyers to be able to fight back,” Hedger told DailyMail.com. “I don’t see why they need to be going after people, you know … the average Joe.”
He added, “You’re going to push more folks into small cash transactions, you’re going to push more banking offshore — the big fish out there that do have sizable assets that are eligible for taxation offshore.”
According to the White House, the plan would prevent tax evasion and the IRS would know how much money is in an individual’s bank account in a given year, and exactly how much is going in and out.
This crackdown on unreported income is expected to generate $460 billion for the IRS, the Daily Mail reported.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
On its website, PayPal says it already reports sales of $20,000 or more to the IRS. It also reports if a user has 200 payments for goods or services in the same year. But this reporting varies from state to state.
In Vermont, Massachusetts, Virginia, and Maryland, PayPal says it reports $600 in gross payment volume from sales of goods or services in a single calendar year, regardless of the number of transactions. And in Illinois, if you receive $1,000 in gross payment volume of goods or services in a single calendar year with at least four payment transactions processed on PayPal, it gets reported.
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