The latest announcements made by the Democrats include a plan that would allow the Internal Revenue to monitor bank accounts with over $600 in deposits and withdrawals.
The Internal Revenue Service and the Treasury asked Congress for an expansion of the bank account monitorization. If this comes to life, the IRS will ask banks to report the financial information of their clients to ensure there is no tax evasion.
The plan is anticipated to get in the way of income that’s earned but not reported to the Internal Revenue Service to avoid tax. Although the majority of the income earned by taxpayers is left reported in their federal income tax returns, the unreported income earned is still creating a gap worth billions of dollars. To create an equal space for every taxpayer, the announced bill is going to monitor bank accounts over $600 and make sure that every taxpayer pays the amount they’re supposed to pay to Uncle Sam.
When is the IRS going to monitor bank accounts?
At the time of writing, this is still in the making and it hasn’t been approved. It’s likely that the IRS will be able to monitor bank accounts over $600 in the next year.
The upcoming changes to the US tax code are expected to cover more than just tax increases and incentives. Similar to the Tax Cuts and Jobs Act back in 2017, a similar bill that will bring changes to the taxes is expected, but it might cover more than just taxes.
The Internal Revenue Service being able to monitor bank accounts could be included in the tax bill change, as it’s directly related to taxes. Otherwise, why would the Internal Revenue Service want to monitor bank accounts? Considering that 61 percent of taxpayers in the United States didn’t pay taxes in 2021, these kinds of measures to get in the way of tax fraud and evasion are the right move for the Treasury and the Internal Revenue Service.
With the upcoming changes to the tax law where the taxes paid by low to middle-income families are somewhat decreased, the IRS monitoring bank accounts and creating a summary of how much income earned by them is likely to happen. When the bill is passed – if it passes at all – we’ll keep you updated with the rest of the details of what it includes.