LITTLE ROCK, Ark. — If you have at least $600 sitting in your bank account, the IRS could end up monitoring your spending. It’s part of President Joe Biden's proposed tax reform and is raising questions about privacy.
A THV11 VERIFY viewer wrote in, asking: "After seeing some banks posting on social media that the IRS is going to start making them report all deposits and withdrawals over $600, can you tell me if this is true?"
Our sources -- the U.S. Department of the Treasury, testimony from the IRS commissioner and Congressman Steve Womack.
At the end of April, President Joe Biden announced the American Families Plan. Included in the proposal – tax reform. In a testimony to the Senate finance committee on June 8, 2021, IRS Commissioner Charles Rettig –lays out what would be included in the plan. You can see here.
Financial institutions would be responsible for reporting your withdrawals and deposits – breaking down physical cash, transactions with a foreign account and transfers to and from another account with the same owner. This would apply to all business and personal accounts with at least $600 in it.
According to the testimony, the purpose of this plan would be to "…improve tax administration and provide the IRS with a blueprint to address various facets of the tax gap."
The plan however has been met with major criticism. Arkansas Congressman Steve Womack joined other lawmakers in writing a letter expressing their concern with the data collection proposal saying, "The requirements of this proposal would impose significant compliance costs on our banks, credit unions, and related financial institutions, but also infringe on the privacy of millions of Americans."
So we can verify, yes, it is true that under President Biden's proposed legislation, the IRS would have access to more information on accounts with more than $600. Keep in mind, this proposal still has to make its way through congress, so things could change.
Remember if there's something you'd like verified email us: firstname.lastname@example.org or reach out to us on social media.