Independent contractors can only escape reporting on private jobs. If they do work for a business, the business has to report any payments over $600 per year to the IRS. The only real money would be in the drug business. Everything else is hard to cheat on. Wages are reported, business payments are reported, cash payments in excess of $10,000 to a business are reported. Home sales and all stock and bond sales are reported. Large gambling winnings are reported. Like I said, the underground economy, outside of drugs, is largely mom and pop small sh*t and you don't get $46 billion in new tax revenue (every year) out of them. And if you watched Ozark on Netflix, you get an idea how hard it is to launder large sums of cash in today's environment. The only real escape is to get large sums of money into offshore accounts. The IRS is focused on this and this new $600 proposal has nothing to do with offshore funds.
This is just virtue signaling and a move to get more government employees and to target conservatives. The real money is in people's IRAs and 401(k) plans and unrealized capital gains. That's why you should never vote for ANY democrat. This is more about punishment than raising tax revenue.
So, right now on my main checking account, the IRS gets one 1099-INT for my interest income for the year. I have probably close to a hundred transactions over $600. The IRS can barely handle their current 1099 matching program let alone hundreds of transactions per millions of bank accounts. Currently, there is a cash reporting requirement for cash payments received over $10,000. The IRS pretty much files the reporting forms and then doesn't do a damn thing with them.
THE IRS WANTS YOUR BANK RECORDS Earlier today, Treasury Secretary Janet Yellin defended the Biden administration’s proposal to require banks to report inflow and outflow information on all accounts with more than $600 or more than $600 in transactions–in other words, virtually all bank accounts:
During an interview on CNBC’s “Squawk Box” on Tuesday, Yellen was pressed on whether the IRS has the “wherewithal” to collect more information about taxpayers and bank accounts including cash flows, something many Republicans have called invasive.
“Well, of course they do,” Yellen said. “Right now, on every bank account that earns more than $10 a year in interest, the banks report the interest earned to the IRS. That’s part of the information base that includes W2’s and reports on dividends in other income that taxpayers earned. So collection of information is routine.”
That is rather disingenuous. Interest paid by banks is income. Employers and many others report income that they pay out to the IRS. This proposal is different: the idea is that the IRS can compare the amounts of money going into and out of bank accounts with the income reported by a given taxpayer. If the reported income doesn’t seem to match the bank records, the IRS can perform an audit.
“It’s just a few pieces of information about individual bank accounts, nothing at the transaction level that would violate privacy,” the secretary said.
So the IRS won’t see what you spent your money on, it will just know how much went into and out of your accounts.
This is from an exchange between Yellin and Sen. Cynthia Lummis during a recent hearing:
[Lummis]: “Bank customers are not subjects to the federal government. Banks do not work for the IRS.”
Yellen defended the plan, telling the senator, “Banks already report directly to the IRS the interest that they pay on accounts when it exceeds $10, and this is not a proposal to provide detailed transaction-level data by banks to the IRS.”
“Well, $600 threshold is not usually where you’re going to find the massive amount of tax revenue you think Americans are cheating you out of,” Lummis fired back.
“That’s correct,” Yellen admitted, “but it’s important to have comprehensive information so that individuals can’t game the system and have multiple accounts.”
Those $600 accounts can add up.
The administration claims this measure would yield something like $46 billion a year in revenue by catching tax cheats. As an honest taxpayer, I am sympathetic to the argument that it is in my interest for cheaters to be caught. The problem is that I don’t trust the Biden administration, and I don’t trust the IRS.
The Democrats have politicized one federal agency after another, and they have weaponized the IRS, in particular, to weaken their political opponents. I have zero confidence that the IRS wouldn’t selectively use this new data source to target Republicans in general, and vocal opponents of the Biden administration in particular. On the contrary, experience suggests that this is exactly what they would do. That being the case, and given the broader concerns about privacy that most Americans share, the last thing I want to do is give the Biden administration private information about essentially every bank account in the U.S.
But how much is it going to cost the tax payers to hire additional IRS agents, upgraded technology, and other resources to collect that $46 billion? And lets not pretend that the government doesn't always overestimate potential revenue and underestimate potential expenses.
If they want to track $10,000 and more, I get that. But the $600 transactions are going to create a backlog in the IRS department. I'd make an argument that resources used for this, will take resources away from catching larger tax cheats, and thus might actually net a negative return on investment.
Exactly. The underground economy (cash) isn't paying taxes. So, if you are a landscape service that gets paid in cash you might get caught. But to find the owner and workers you would need a lot of resources. You have an IRS agent contact the owner and then have to go through all of the deposits and withdrawals to reconstruct the actual taxable income. Then you send the owner, who has no real money, a bill for $10,000 then you have to try and collect it. And that assumes that all that cash (checks) is getting run through the bank account. This is just a clusterfuck thought up by incompetents. They aren't following up on the existing $10,000 cash forms let alone $600.
Only if the landscaper is stupid enough to deposit the cash.
So, right now on my main checking account, the IRS gets one 1099-INT for my interest income for the year. I have probably close to a hundred transactions over $600. The IRS can barely handle their current 1099 matching program let alone hundreds of transactions per millions of bank accounts. Currently, there is a cash reporting requirement for cash payments received over $10,000. The IRS pretty much files the reporting forms and then doesn't do a damn thing with them.
THE IRS WANTS YOUR BANK RECORDS Earlier today, Treasury Secretary Janet Yellin defended the Biden administration’s proposal to require banks to report inflow and outflow information on all accounts with more than $600 or more than $600 in transactions–in other words, virtually all bank accounts:
During an interview on CNBC’s “Squawk Box” on Tuesday, Yellen was pressed on whether the IRS has the “wherewithal” to collect more information about taxpayers and bank accounts including cash flows, something many Republicans have called invasive.
“Well, of course they do,” Yellen said. “Right now, on every bank account that earns more than $10 a year in interest, the banks report the interest earned to the IRS. That’s part of the information base that includes W2’s and reports on dividends in other income that taxpayers earned. So collection of information is routine.”
That is rather disingenuous. Interest paid by banks is income. Employers and many others report income that they pay out to the IRS. This proposal is different: the idea is that the IRS can compare the amounts of money going into and out of bank accounts with the income reported by a given taxpayer. If the reported income doesn’t seem to match the bank records, the IRS can perform an audit.
“It’s just a few pieces of information about individual bank accounts, nothing at the transaction level that would violate privacy,” the secretary said.
So the IRS won’t see what you spent your money on, it will just know how much went into and out of your accounts.
This is from an exchange between Yellin and Sen. Cynthia Lummis during a recent hearing:
[Lummis]: “Bank customers are not subjects to the federal government. Banks do not work for the IRS.”
Yellen defended the plan, telling the senator, “Banks already report directly to the IRS the interest that they pay on accounts when it exceeds $10, and this is not a proposal to provide detailed transaction-level data by banks to the IRS.”
“Well, $600 threshold is not usually where you’re going to find the massive amount of tax revenue you think Americans are cheating you out of,” Lummis fired back.
“That’s correct,” Yellen admitted, “but it’s important to have comprehensive information so that individuals can’t game the system and have multiple accounts.”
Those $600 accounts can add up.
The administration claims this measure would yield something like $46 billion a year in revenue by catching tax cheats. As an honest taxpayer, I am sympathetic to the argument that it is in my interest for cheaters to be caught. The problem is that I don’t trust the Biden administration, and I don’t trust the IRS.
The Democrats have politicized one federal agency after another, and they have weaponized the IRS, in particular, to weaken their political opponents. I have zero confidence that the IRS wouldn’t selectively use this new data source to target Republicans in general, and vocal opponents of the Biden administration in particular. On the contrary, experience suggests that this is exactly what they would do. That being the case, and given the broader concerns about privacy that most Americans share, the last thing I want to do is give the Biden administration private information about essentially every bank account in the U.S.
But how much is it going to cost the tax payers to hire additional IRS agents, upgraded technology, and other resources to collect that $46 billion? And lets not pretend that the government doesn't always overestimate potential revenue and underestimate potential expenses.
If they want to track $10,000 and more, I get that. But the $600 transactions are going to create a backlog in the IRS department. I'd make an argument that resources used for this, will take resources away from catching larger tax cheats, and thus might actually net a negative return on investment.
Exactly. The underground economy (cash) isn't paying taxes. So, if you are a landscape service that gets paid in cash you might get caught. But to find the owner and workers you would need a lot of resources. You have an IRS agent contact the owner and then have to go through all of the deposits and withdrawals to reconstruct the actual taxable income. Then you send the owner, who has no real money, a bill for $10,000 then you have to try and collect it. And that assumes that all that cash (checks) is getting run through the bank account. This is just a clusterfuck thought up by incompetents. They aren't following up on the existing $10,000 cash forms let alone $600.
Only if the landscaper is stupid enough to deposit the cash.
At some point you have to pay the mortgage and other bills. Tough to just endorse a check over to the mortgage holder or landlord.
Independent contractors can only escape reporting on private jobs. If they do work for a business, the business has to report any payments over $600 per year to the IRS. The only real money would be in the drug business. Everything else is hard to cheat on. Wages are reported, business payments are reported, cash payments in excess of $10,000 to a business are reported. Home sales and all stock and bond sales are reported. Large gambling winnings are reported. Like I said, the underground economy, outside of drugs, is largely mom and pop small sh*t and you don't get $46 billion in new tax revenue (every year) out of them. And if you watched Ozark on Netflix, you get an idea how hard it is to launder large sums of cash in today's environment. The only real escape is to get large sums of money into offshore accounts. The IRS is focused on this and this new $600 proposal has nothing to do with offshore funds.
This is just virtue signaling and a move to get more government employees and to target conservatives. The real money is in people's IRAs and 401(k) plans and unrealized capital gains. That's why you should never vote for ANY democrat. This is more about punishment than raising tax revenue.
I registered as an independent years ago knowing that political affiliation of either party would eventually lead to discriminatory practices of some sort by the federal government.
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This is just virtue signaling and a move to get more government employees and to target conservatives. The real money is in people's IRAs and 401(k) plans and unrealized capital gains. That's why you should never vote for ANY democrat. This is more about punishment than raising tax revenue.