Treasury Defends IRS Plan to Track Most Bank Accounts
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Treasury defends IRS plan to track most bank accounts:
The Treasury is defending its proposal to track banking information for nearly all Americans, after pushback from the finance industry and Congressional Republicans made the proposal a subject of heated debate in Congress.
A senior Treasury official told CBS News that tracking a small amount of information for nearly every bank account in the U.S. would help the IRS spot high-income people who are skipping out on taxes. Tracking the information would also provide additional verification that low-income workers are meeting their obligations.
The Treasury's proposal has been criticized for a cutoff that appears exceedingly low - just $600 in a bank account, or a single $600 purchase, would be enough to trigger disclosure of that account's existence, according to an initial plan released in May. It now seems likely that number will rise to $10,000. But the financial industry claims that small business owners and independent contractors would be caught in a "dragnet" of surveillance - rather than the wealthy.
"While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population," the American Bankers Association and a coalition of business groups wrote last month.
However, according to a senior Treasury official, the reason for setting the cutoff at such a low amount is not to trap low-income earners but rather to block wealthy people from sidestepping scrutiny. That's because a high threshold for disclosure - say, $100,000 - could easily be avoided if wealthy people simply moved money between several smaller bank accounts. After all, it's not uncommon for one person to have multiple bank accounts.
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