The Biden administration’s goal here is to increase tax revenue by making sure no income avoids detection. How will the administration do this? It plans to leverage financial institutions like banks.
“[T]his requirement would apply to all business and personal accounts from financial institutions,” the proposal reads, “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.”
In other words, financial institutions will report any flows in and out of business and personal accounts of more than $600.
This reporting requirement is far above any current requirements on financial institutions. As the document itself states, currently only information for certain types of revenue (including 1099 forms MISC, NEC, and K) require reporting.