One of my E.A. friends broadcast on the radio that with one of the bills in front of Congress, banks would be required to report any transaction $600 or more, similar to the requirement to report $10,000. I'm thinking the banking lobby will cry like a stuck pig.
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We all should be fighting this. The IRS can't keep up with what they are doing, or not doing, now. We preparers will be flooded with extra work trying to reconcile these forms to fit the tax return and hoping that there will not be any IRS notices. Our fees will have to double or triple or even more to keep this strait.
What about those taxpayers who move funds from one account/bank to another account/bank? And these taxpayers may not have a filing requirement now, but may have one if this law passes.
The "President????" has no clue and Congress follows him!
One more reason why I am retiring this year. One more extension to file by 10/15/21 and I am through!Last edited by Jiggers; 09-26-2021, 06:13 AM.Jiggers, EA -
Jiggers: Please keep visiting us in your retirement.Comment
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Originally posted by Jiggers View Post
What gives you that idea? I haven't seen ANYTHING that indicated that taxpayers would receive a form. It would just be from the banks to the Treasury, just like they currently do for transactions of $10,000+. While it could give the IRS some 'red flag' triggers to possibly audit, it would not affect tax preparation at all.
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Hopefully there will be a stalemate in Senate and the whole thing goes down! Sen. Manchin we are counting on you!Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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I think you are misunderstanding the problem.Originally posted by TaxGuyBill View Post
The way I understand this, the banks will have to issue a form, not necessarily a 1099, for all the transactions that total $600 or more.
A client who received a W-2 plus 1099INT's, deposits his paycheck weekly, totaling over $600 per year and received 1099INT's totaling over $600 per year. He transfers some of those funds into his wife's account that total over $600 per year. There are several forms that will be issued over $600 in addition to his W-2 and 1099INT's. The IRS is going to receive all of those forms and will be looking for that income that is not really income.
Same applies to a non-filer because he doesn't work. Only received a small retirement and interest income and Social Security. He transfers those funds to various other accounts and/or banks and they will total more than $600 in a year each. Total is less than the filing requirement. Now the IRS is receive forms that may or may not require filing a return.
We return preparers will have to do something with them when the client brings them in to be sure they are not being double taxed.
Extra work and an increase in fees!
Or am I not understanding what this possible new law will require?Jiggers, EAComment
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Originally posted by Jiggers View Post
Do you have any citations for that? As I said in my original response, I've seen NOTHING that indicates that any form would be sent to the taxpayers. It would only be between the bank and the Treasury.
Even if a form was issued to the taxpayer, why on earth would you think it would be reported on a tax return?
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TGB - because someone said it on the internet. Don't you know everything on the net is correct?Originally posted by TaxGuyBill View Post
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I believe the bill is for all banks to report all accounts that have over $600 balance to IRS, so they can decide if they want to audit. Its not about reporting transactionsComment
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I might be wrong in what I have read and/or heard. But if the IRS gets all of these notices, it surely will result in correspondence to the taxpayer to explain why the tax return doesn't come close to the transactions that they are receiving from the banks.Originally posted by TaxGuyBill View PostJiggers, EAComment
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Jiggers, did you not read my post ? The bill has to do with bank account info turned over to IRS for audit purposes, not reporting transactions.Comment
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Also read your reply post. It might be better if you provide exactly where in the government information it shows (your source) when you say “The bill has to do with bank account info turned over to IRS for audit purposes, not reporting transactions.” That should settle the issue whether it was on the internet or news media or your source for others to rely other than another hearsay comment.Originally posted by terryats View Post
Also, maybe explain why the IRS will be hiring thousands of new employees for this issue!Last edited by TAXNJ; 09-30-2021, 08:28 AM.Always cite your source for support to defend your opinionComment
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this is a quote from Olean Times Herald
"The Biden administration has made clear its plan to beef up IRS auditing by expanding the agency’s funding and power. Biden’s latest proposal would require banks to turn over to the Internal Revenue Service bank account information for all accounts holding more than $600".
There are plenty of stories out there about the Biden proposal, but I can't see how it is going to affect peoples tax return, as most I get out of it is that it will increase auditsComment
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Let me think this out.....
I work and get a W2 and it is deposited directly into our bank account by my employer.
My wife works and gets a W2 and it is deposited directly into the same bank account by her employer.
We have rental property and receive $1,000 per month rent and I deposit that into another bank account.
At the end of the month, I transfer all excess funds to money market account drawing higher interest in a third bank and get a 1099INT for the interest earned.
Every few months I take some of the money in the money market account and open a CD at higher interest in a 4th bank and get a 1099INT for the interest earned.
All of these amounts are going to be reported to the IRS by each bank.
Are you saying that the IRS will know that this money has been reported on our tax return and no audit is needed????Jiggers, EAComment
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The way I see it, if a clients return is chosen for audit, the irs has access to all their monitory accounts over $600. Think about it, how could the irs hire enough people to go through this entire country's financial records every year. Just the way I look at it, but I doubt Biden will get it through congress.
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