Democratic Sens. Elizabeth Warren and Ron Wyden are scaling back their plan on requiring banks to report account information to the IRS following industry and Republican pushback. The amended plan would require banks to list accounts with annual deposits or withdrawals greater than $10,000, significantly higher than the $600 threshold in the initial proposal. Deposits from payroll companies and Social Security would also be exempt.
- The Democratic plan aimed to crack down on tax evaders by allowing the IRS to compare an individual's tax returns with what is reported in their bank accounts.
- Wyden said the changes to the bill could help focus the IRS's attention on the wealthiest of tax cheats.
- Republicans have said the legislation could constitute an invasion of privacy and pose logistical challenges for banks.
- Some critics have suggested that the IRS would be tracking individual transactions in bank accounts, though the Biden administration says this won't be the case.
- The White House has remained firm that audit rates would not increase for those with less than $400,000 in annual income.