Banks would be required to give the IRS information on accounts that withdrawal or deposit more than six hundred dollars. This proposal is now striking up concerns over privacy. Douglas Braff spoke to some people in state college, as well as to a Penn State professor about all of this and has their reactions to the proposal.
The proposed law would require banks to give the IRS data on accounts that deposit or withdraw more than six hundred dollars. One man says while he wants people to pay their taxes, this goes too far. Six hundred dollars seems to be a pretty small amount for the IRS to be involved in.
And I am not big on government, you know, worried about government intrusion. But six hundred dollars seems like it’s government intrusion. Another man felt similarly saying focusing on such small transaction amounts might distract the IRS from getting the bigger fish.
If I want to move six hundred dollars from one account to another, from one account to my pay card or something like that, I should be able to do that without anybody, you know, without any evasiveness on the IRS part.
But there’s more to the proposed law that meets the eye, says Penn State Professor Ed Jenkins, who is also part of the American Institute of Certified Public Accountants. Jenkins explains there is a one hundred and sixty six billion dollar tax gap, that being the difference in amount of taxes collected by in taxes owed to the IRS.
And so the administration seeks to close that tax gap to help folks pay the amount of tax that they’re actually do. So it’s maybe a little bit of a sledgehammer to kill the fly in certain respects, but it’s a hundred and sixty six billion dollars fly.
They’re trying to fix. Another caveat is the IRS has struggled to bring cryptocurrency into compliance with tax law. So currently the IRS views cryptocurrency as what we call property, like a stock or a bond. So the way the IRS would treat that is you actually would have to report that transaction as a gain or loss on sale
of cryptocurrency. Regarding the administration’s proposal, Jenkins thinks that in its current form, it’s a bit overkill and it likely won’t pass Congress. However, he feels more needs to be done about the tax gap. And really, when people don’t pay their taxes, it’s a big problem for us who are paying our taxes because we got to cover it for him.
Reporting from State College, this is Douglas Braff.