With the need to increase tax revenue to ensure that no one is underreporting their income in order to avoid detection, the Treasury Department has shed new light on Biden’s plan for financial reporting, explaining in their Green book that they have a proposal to “create a comprehensive financial account information reporting regime.”
It intends to do so by leveraging the help of banks, with the revenue proposal revealing:
“This requirement would apply to all business and personal accounts from financial institutions, 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.”
This would also include crypto-asset exchanges. With these financial institutions legally obligated to report any flow in and out of one’s personal bank account, the government will always have a much better sense of your finances than they previously had, with the regime expanding current reporting on Form 1099-INT, Interest Income, and Form 1099-K, effective December 31, 2022.
This law goes even further than the Patriot Act did, which only required banks to report “suspicious’ transitions of over $5000, and not regular purchases like wanting to buy a cell phone or a new offroad trailer. Now, they will also be able to see things like transfers and payments to friends and family, which now becomes reportable transactions if over $600.
Rather than having just had an idea of how much money is in one’s account, the government will have access to records showing when the money is going out, and who it is going to. Currently, there is no requirement for banks to do this, and so this goes far above and beyond what is obligated, effectively ending financial privacy and granting the government an unprecedented look into one’s finances.