The Biden Administration plans on taking unprecedented looks at individual's bank accounts.
In May, the Treasury Department released the Biden administration's revenue proposals for fiscal year 2022. One aspect of this document that has gone under-reported is the administration's new plan for reporting requirements for financial institutions.
The document is unequivocal about the administration's goal for financial reporting, stating, "this proposal would create a comprehensive financial account information reporting regime."
The Biden administration's goal here is to increase tax revenue by making sure no income avoids detection. How will the administration do this? It plans to leverage financial institutions like banks.
"[T]his requirement would apply to all business and personal accounts from financial institutions," the proposal reads, "including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600."
In other words, financial institutions will report any flows in and out of business and personal accounts of more than $600.
This reporting requirement is far above any current requirements on financial institutions. As the document itself states, currently only information for certain types of revenue (including 1099 forms MISC, NEC, and K) require reporting.
Some may view this proposal by the Biden administration positively. After all, this isn't an attempt at raising taxes. The goal of this policy is to ensure individuals pay what is legally required, isn't it?