The IRS is looking to get you!

This is an email I got from one of my banks today. It sounds like they are trying to do a George Orwell on us. Or is this to catch people using PayPal and Venmo and other ways to skirt the reporting criteria that the IRS has established?

September 28, 2021
To our Valued Customers:
As your Hometown Bank, we want our customers to know the facts, especially when it comes to developments concerning public policy affecting your financial privacy.

The Biden administration has proposed requiring all community banks and other financial institutions to report to the IRS deposit and withdrawal information for all business and personal accounts with flows of over $600, regardless of tax liability.

This indiscriminate, comprehensive bank account reporting to the IRS may soon be enacted into law in Congress and would create an unacceptable invasion of privacy. We work for our customers and our community, not the IRS. This IRS bank account profiling is intrusive and compromises your privacy. Basically, all your account transactions will be reported to IRS.

Let’s work together to spread the word about this misguided proposal. Therefore, please take a quick moment to send off a letter to your congressional representative and to Senators Cornyn and Cruz. However, if you would like a simple, quick, and efficient process, simply click on the link below and enter your name and home address. A pre-written letter prepared by the American Bankers Association will populate and will be addressed to your member of congress based on your home address. A letter will also be sent to Senators Cornyn and Cruz.
Thank you for taking the time to do this.

Oh, my wife told me about the $600 limit last month, and only that was any deposit over $600 in a month.

Edited 1 time(s). Last edit at 09/29/2021 12:49AM by 2stepps.

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I have heard of no such and if it was a legitimate suggestion of the current administration there would be howls and objections by congressional members in news conferences in front of microphones in the Capitol building. That they want to send copies to Cornyn and Cruz tells me this is from "The Department of Misinformation". Big difference from the Patriot Act established by the Bush administration 20 years ago where any deposit of $10,000 or more needed to be reported as to source unless it was from an obvious transfer between accounts where the recipient and donor were one-in-same.
Nope, it's true. The banks are fighting it in DC, and some are contacting customers to try to get them engaged. The $600 limit won't stand, but there will be new reporting requirements for banks and less privacy for citizens.
1099-Ks will be issued for all 3rd party transactions in excess of $600 starting in 2022. This has been lowered from the current $20k or 200+ transactions. I do not believe Venmo, Zelle or banks are included at this juncture in time but wait for it. Big topic at my job. [www.pwc.com]
@Madetoshop wrote:

1099-Ks will be issued for all 3rd party transactions for goods and services in excess of $600 annually starting in 2022. This has been lowered from the current $20k and 200+ transactions. I do not believe Venmo, Zelle or banks are included at this juncture in time but wait for it. Paypal is definitely included. To me, this may result in one big mess. 1099 MISC issuance in addition to 1099-Ks. Double reporting? Big topic at my job. [www.pwc.com]
It is 100% true. All of the conservative talk show hosts have been discussing it since last week. Congress needs to hear from us. This regulation is unnecessary and invasive on so many levels.
@Travelchic1984 wrote:

It is 100% true. All of the conservative talk show hosts have been discussing it since last week. Congress needs to hear from us. This regulation is unnecessary and invasive on so many levels.

That "conservative talk show hosts have been discussing it..." would normally be a strong indication that it is not true.

Edited 1 time(s). Last edit at 09/29/2021 05:35AM by Rousseau.
Yes, but what is the bill number that they are discussing it on? Or maybe it is in the massive spending bill that they are trying to pass. Here is a link to a youtube video [www.youtube.com] Or if you do not want to click on it, just go to youtube and look for this title 'Dangerous New Proposal To Change Banking As We Know It' When I was first told of this last month I did not believe it, but I got a letter from on=e of my banks today that I posted above.
I received something similar from one of my banks.

Among other things, persons with no criminal intention will be unable to spread their wealth freely, as they see fit, without one hand knowing what the other should be giving without fanfare and in secret (which should be religiously free and separate from government), etc.

The human spirit needs places where nature has not been rearranged by the hand of man. ~ Unknown
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
_____
Yes, what is the bill number; can anyone tell us that? Or if it's in the overall spending bill, does anyone know what section? I'd like to look this up.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
It’s in the 3.5T spending bill. So blessed to have conservative talk show hosts to help keep us informed. This proposal affects every single American. Paul Merski with the Independent Community Bankers of America is on Glenn Beck’s program this morning discussing this horrendous proposal. [www.rfdtv.com]

Edited 1 time(s). Last edit at 09/29/2021 03:52PM by Travelchic1984.
It is true and it is in the budget reconciliation bill. It is being discussed everywhere and banks are now having radio and tv ads to inform customers. $600 and up transactions would be included. This is their way of trying to catch tax “cheats” and produce more tax revenue to pay for their reckless spending. PayPal would be included. I am not sure about the others.

Everyone should be against this. Hell one of my car payments is over $600 a month. It is no ones business what I spend my money on. As someone who has had to go through an IRS audit you don’t want this kind of invasion. I ultimately won, but it cost me $5k for a lawyer. If you work like we do with mileage and expenses you already are a red flag for being audited. Why hire thousands more IRS agents and give them more power? So Congress can give our money to non citizens and spend it on programs so that people don’t have to work? Frankly I’m tired of working so others can have a free ride.
The Independent Community Bankers of America have a link at their website to contact our members of Congress in objection to this hideous proposal: [icba.quorum.us]
Anyone under the delusion that these money transactions can not be tracked now if someone wants to look hard enough is not facing reality! First of all, remember they tracked the money on that big ransomware attack of the oil company? Certain offshore banks can't be tracked true and if the money is moved rapidly through these accounts by cybercriminals some can circumvent the system. As for Venmo, PayPal, Bitcoin, etc, this was simply a matter of time before it happened. And it should RIGHTLY happen. Not reporting your income ultimately hurts the person. True it hurts to give a portion to your government for them to use as they see fit. But not reporting your income hurts your Social Security benefits. If you become disabled you draw less money per month and when you decide to retire. Let me also tell you a hidden cost of not reporting your income to the IRS. When it comes time to borrow money you can't borrow more than you're allowed to based upon your "reported" income. This includes houses, cars, and business loans. I know because I have been disabled for many years. I've also deducted so many expenses where I have reduced my income to pay the taxes that I felt like I could afford to pay. But in the end, your gross pay doesn't matter to the bank or other loan companies. Your AGI is all that matters. People that hire independent contractors have long been required to report amounts in excess of $600. It was simply a matter of time till laws were implemented to track other forms of income. It should not be "easy" for people or criminals to launder money through these new sources. The FBI and CIA etc can track the money now if they have a reason to. I don't have a problem with it unless it becomes so complicated that it ends up looking like you made "double money".
I see all of the posted points and now remember reports, articles and rl concerns regarding all sorts of monetary fraud. Anyone can search for the person who cavalierly ripped off millions of dollars in unemployment funds... Hubby's little girlfriend and uncle who are converting funds from somewhere to bitcoin... Every day I hope and pray that hubby will not end up in the clink...

Using fake unemployment claims as an example: Could this new monetary limitation make it more difficult to establish a false identity for fake unemployment claims? And, could the $1 for fake names for gmail gig (mentioned on other board) test some aspect of identity security?

Regardless. It was stanky to attempt to bury this proposed change within a large bill regarding infrastructure.

The human spirit needs places where nature has not been rearranged by the hand of man. ~ Unknown
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
_____
I haven't had a chance to research this, but it sounds like, based on the amounts being tossed around here, this is an attempt to not allow ICs, the self-employed, gig workers, etc., to circumvent claiming income of less than $600 from any one vendor/client. It you don't get a 1099, you still have to claim it--to not do so is illegal. It's foolish, anyway, because by the time we deduct expenses, that amount less than $600 amounts to not much!

I remember being amazed when PayPal started reporting payouts of $20k and up. I remember thinking, "Why so high?" It seemed to make it easier for people to not claim non-W-2 income.

I'm reserving opinion on how I feel about this until I can read the facts for myself. But, really, people are right when they say that if the IRS or some other government agency wants to track down the money, they can and will. After all, MSCs report payments to shoppers as expenses--if the IRS wanted to match payouts to shoppers who earned less than $600 in a year (so didn't get a 1099), they could. I don't know why anyone who is self-employed would not report verifiable, documented income--if that's the problem some people have with this. I know that some self-employed don't report cash payments, but if they deposit the money in their bank accounts instead of stuffing it in their mattresses, then somebody can find it already. And if that person applies for, say, a mortgage, as someone else mentioned, they will have to either account for such deposits or explain how they happen to have 20% down payment on an income that doesn't show enough to have that much. If it's a gift, it has to be documented. So, even now, cash gifts to others can't be "hidden" all the time. I had real-estate clients once who made a lot of money in their business, but didn't claim all of it, didn't bank all of it, and didn't have established credit. They had enough $$ for a down payment, but didn't meet any of the other criteria. I worked with them for years advising them, and had them talk to my mortgage broker, before they finally started doing what they needed to do to get a mortgage. It did not pay off for them to avoid paying the IRS.

I imagine this won't affect the rules around gifts of cash to people such as one's children.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.


Edited 1 time(s). Last edit at 10/01/2021 02:27AM by BirdyC.
It seems like all of you have missed the point. This is a violation of your 4th amendment right. To be secure from searches. Even though the Banks have to do it for the Feds.
@2stepps wrote:

It seems like all of you have missed the point. This is a violation of your 4th amendment right. To be secure from searches. Even though the Banks have to do it for the Feds.
and it's your right to die from not being vaccinated. Just make sure you don't take one of your elders with you. So drug dealers have a right to be free from search and seizure just because they haven't got caught yet. Good luck with that. If you're so into preserving your rights then admit that women have a right to have an abortion, even in Texas.
Are you suggesting that all of must be subjected to rightful and wrongful searches and seizures because some of us might be doing something wrong? This is a bit like grade school where the entire class is kept in during recess and denied a field trip because one kid acted out in class. The kiddies should howl in protest and apply peer pressure to the baddie! I would suggest that the brilliant minds of the world quickly find better ways to identify and isolate the wrong-doers. Otherwise, this encroachment will continue unchecked. Little by little, more and more privacy and more and more reasonable rights are being invaded and eroded, even as rights to nonsensical things are being expanded and foisted upon the populace.

As a woman, I do not and will not believe that I have the right to have an abortion. Rather, any life that has begun or will reach a legally recognized beginning point takes precedence and should be honored and valued. There are still plenty of honorable people who could assist with or adopt any child that a parent felt they could not keep or care for alone, considering their current circumstances. As the covered portion of my siggy states, "I’ve noticed that everyone who is for abortion has already been born." - Ronald Reagan



@F and L TeleComm wrote:

@2stepps wrote:

It seems like all of you have missed the point. This is a violation of your 4th amendment right. To be secure from searches. Even though the Banks have to do it for the Feds.
and it's your right to die from not being vaccinated. Just make sure you don't take one of your elders with you. So drug dealers have a right to be free from search and seizure just because they haven't got caught yet. Good luck with that. If you're so into preserving your rights then admit that women have a right to have an abortion, even in Texas.

The human spirit needs places where nature has not been rearranged by the hand of man. ~ Unknown
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
_____
This is apparently being re-negotiated. They've dropped the $600 limit and are considering raising it in order to NOT "go after" the little guys, but the larger income earners who don't claim all of their income and, consequently, don't pay their actual tax burden. This proposal is an attempt to ensure that the IRS could see what it was receiving in tax revenue vs. what it's supposed to be receiving. IOW, to weed out those who try to hide income. Estimates are that there's just a 45% tax-compliance rate by non-W-2 earners, while there's a 99% one for W-2 wage earners..

"The latest IRS estimates show a tax gap of $166 billion per year between the tax owed by businesses (not counting large corporations) and the tax actually paid."

The banks rebelled at this not because they really care about protecting their depositors, but because it would be costly and too burdensome on them to implement.

Contrary to some outrageous claims being made in the media, nobody's going to monitor how much you spend on Christmas presents or what you buy! Some of the statements I read are so outlandish I can't believe people believe them.

"However, the banks would not report details on individual transactions, like how the money was spent, only the total amount of money flowing in and out of the applicable accounts.

Having that information will help the IRS flag under-reported income and target enforcement activities on tax evaders, the Treasury said."


Some people here have said they don't want to pay for others to have a "free ride," or whatever language was used. I'm not sure how that's relevant to this discussion, but.... I don't want my tax dollars used to pay for those who don't pay their fair share. I also don't think that small businesspeople should be the focus of this, and apparently the politicians agree. They want the bigger fish.

This may be being presented by some people as "Big Brother" trying to track all of your financial dealings, but that's not really the case.

There's a lot of misinformation about this!

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
I got another email from PayPal asking me to confirm my taxpayer status. I won't do it at this point.

Happiness is not a goal; it is a by-product. Eleanor Roosevelt
Make double sure the email is actually from PayPal and not a scam if they ask you to click on a link in the email it will 99% of the time be a scam.
I'm totally against million-dollar companies getting all of their taxes written off. People seem to fail to realize the total impact of what taxes are used for. It is used to pay for ALL EMERGENCY SERVICES, including the fighting fires in the national parks. So those fires in California are not your responsibility. But when your grandkids don't have air to breathe then is it our responsibility! When it take 5 hours to get an ambulance the next time your having a heart attack, I guess you will still pass the buck on whose job it is to pay them. I get $884 dollars a month from disability and even with $350 dollars a month rent it is not enough to maintain. If I don't have a car I am housebound. So I work to have a car and maintain as much of an active lifestyle as possible for as long as possible. Is it easy? No, but I don't want my mobility issues to get worse. Even with working, I can't afford to eat healthy all month long. Ramen noodles and cheap sausage is not the greatest but I have to eat so many meals of them to afford to eat a salad at the current prices! I can only afford the cheapest cereals (usually under 2 dollars a box). Cheerios and raisin bran can only go so far. People have been filtering money through these sources for years and getting away with it. I can't work my garden properly but guess what? I still tried to grow one! So I could eat more vegies! I've invested almost every extra dime in a little rent house. It's not much but it's a start. (It's only worth about 37k). Will it help to stop this fraud of tax evasion and stopping big businesses from not paying taxes? I personally think so. Then pressure can be taken off of the low-wage earners, under 50k.
I checked; it came from the company. There was also a clickable link on the PayPal website.
@2stepps wrote:

Make double sure the email is actually from PayPal and not a scam if they ask you to click on a link in the email it will 99% of the time be a scam.

Happiness is not a goal; it is a by-product. Eleanor Roosevelt
Is it your intent to have PayPal decline to send you any payments? What are you holding out for?
@KathyG wrote:

I got another email from PayPal asking me to confirm my taxpayer status. I won't do it at this point.

Shopping Southeast Pennsylvania, Delaware above the canal, and southwestern NJ since 2008
When an actual law is passed and they mandate the information (i.e., it shows up in the User Agreement or I stop getting paid) then I will be happy to provide it.
@myst4au wrote:

Is it your intent to have PayPal decline to send you any payments? What are you holding out for?
@KathyG wrote:

I got another email from PayPal asking me to confirm my taxpayer status. I won't do it at this point.

Happiness is not a goal; it is a by-product. Eleanor Roosevelt
According to PayPal, this is already a law--unless they've jumped the gun and are doing this ahead of time or unless some legislation was already passed separate from the bill under discussion here. I don't know.

"Why do I have to provide my tax information, and how do I do it?
Recent legislative changes in the US require payment processors, including PayPal, to report gross payment information to the IRS on Form 1099-K for customers who receive payments of $600 USD or more for the sale of goods or services.

You may have been notified to provide your Taxpayer Identification Number and confirm your tax status if you’ve received payments for goods or services through PayPal, and don’t have a Taxpayer Identification Number (TIN) updated in our records. This is required by the IRS and US state revenue authorities.


PayPal has had this as a term of service for years for people receiving $20,000+ through PP. It looks like this has just changed. I'm assuming that this new regulation is just for payment processors at this point and not the same as the banking-account transactions that are included in the spending bill that's been discussed here.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
No, it’s for anyone who withdraws $600 from their bank account or engages in any transaction $600 or more.
Well, I have seen that it says if you have $600 flowing through the account. And that means that it will affect everyone. Because Rent, Electric, Gas, (for home and car) groceries all come the more than $699.00 not to mention your cable bill, the cell phone bill, the internet bill if separate, or all of your streaming bills.
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