BOTETOURT COUNTY, Va. (WFXR) — Some banks — including the Bank of Botetourt — are now on edge, saying a new proposal on Capitol Hill for reporting to the Internal Revenue Service (IRS) would cost bank customers more money.
The plan would force banks to report any transaction over $600. That means any time you withdraw or deposit that much money, your bank would have to tell the IRS.
The Bank of Botetourt argues that this plan will cost Americans the right to financial privacy. The bank even took to Twitter last week, asking customers to contact lawmakers and express their opposition.
“This is complete overreach, any consumer should be upset about this,” said Len Hayth, the president and CEO of the Bank of Botetourt. “That’s inflow or outflow of deposits, which is practically every banking customer in the country.”
The bank also warned customers that if the proposal goes through, there’d be some big changes.
For example, banks would have to hire more workers to track transactions, meaning you could see more fees on your account.
The IRS would also be receiving quite a few details about your account. Leaders at the Bank of Botetourt say that could make people less trusting of their bank.
“If you’re an individual who’s got $600 in transactions after the course of the year, do you really want the IRS tracking you down about the income you made or the transfer of accounts you made versus actually going after the ‘One Percent,’ who are avoiding paying taxes now?” Hayth added.
Professor Gerald Prante from the University of Lynchburg, who has experience with tax policy in D.C., believes this strategy to find more tax evaders will subject more people to an IRS audit.
“Just like any crime, you have to put more resources and means into finding people who are violating the law, so they want to give the IRS more authority to try and find people who aren’t paying their taxes,” explained Prante. “You could have a situation where companies who are avoiding the law could get caught if they start looking into more of your finances.”
In addition, the professor says that online businesses could face scrutiny for not reporting all of their income to the IRS.
According to Prante, this will allow the IRS to get a hold of more people reporting personal charges as business expenses and go after them with more resources.
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