US Treasury Department Seeks to Track Financial Transactions of Personal Bank Accounts Over $600: The Biden Administration plans on taking unprecedented looks at individual's bank accounts.

In May, the Treasury Department released the Biden administration’s revenue proposals for fiscal year 2022. One aspect of this document that has gone under-reported is the administration’s new plan for reporting requirements for financial institutions.

The document is unequivocal about the administration’s goal for financial reporting, stating, “this proposal would create a comprehensive financial account information reporting regime.”

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.

Some may view this proposal by the Biden administration positively. After all, this isn’t an attempt at raising taxes. The goal of this policy is to ensure individuals pay what is legally required, isn’t it?

There are two issues with this way of thinking.

Cutting off Air to the Market

The first issue is highlighted by economist Ludwig von Mises’s insight that “capitalism breathes through [the] loopholes.” The great innovations and improvements in well-being made available through capitalism were not generated in a loophole-free system. Oftentimes, the most important innovations begin as small start-ups with razor thin margins. As loopholes close, the chance of these risky start-ups succeeding declines.

Entrepreneurs are not ignorant to the barriers of regulations and taxation. When something is taxed, you get less of it. If any entrepreneurs are right on the fence of whether a new business venture is likely to be worth it, increasing costs even a little bit may be enough to persuade them otherwise. Economists call this “being on the margin.”

Avoiding taxes and reporting on small dollar transactions (either intentionally or unintentionally) is another form of loophole. De jure businesses are required to follow strict tax reporting rules, but, much like driving the speed limit, the de facto reporting often departs from the official rule.

To understand the danger of making businesses comply with tax law to the letter, consider how difficult it would be for businesses to do so. The tax code is now so long that nobody, including government officials, are sure of its length. How can business-owners be sure they’re complying with a document of unknown length? Put simply, they can’t.

Therefore, not only will these increased financial reporting requirements raise taxes on entrepreneurs on the margin, they will also force businesses to expend more time and resources ensuring they pay the proper amount of taxes. Any tax audit with access to every account transfer over $600 will crush businesses without a team of accountants or lawyers able to justify every transfer.

The burden of this policy, then, will fall primarily on small businesses without access to a massive internal legal team. A policy that punishes small businesses like this may be good for large corporations, but it’s bad for market competition.

As Mises noted, capitalism suffocates without loopholes.

The End of Financial Privacy

The second issue associated with Biden’s proposal is its effect on financial privacy. The administration’s focus on increasing financial reporting is becoming a consistent theme. For example, the “information reporting regime” document also includes proposals for cryptocurrency reporting which can be seen as a precursor to the crypto reporting requirements shoehorned into the “infrastructure” bill.

The increase in financial scrutiny provided by access to every transaction greater than $600 associated with personal accounts would provide an unprecedented look into the finances of many Americans. Even the powerful political will behind the 2002 “Patriot Act” only led to requirements that banks report suspicious transactions of $5,000 or more.

Much like small businesses, most individuals don’t have access to a team of lawyers and accountants the same way DC politicians and bureaucrats do. As such, these new requirements are likely to hurt poor and middle income Americans whose primary source of income is non-traditional. This is unsurprising given the Biden administration’s record of threatening gig work, for instance.

Some may argue that privacy is unnecessary because you have nothing to fear if you have nothing to hide. But, again, individuals cannot be expected to perfectly comply with a document of unspecified length. Unfortunately, as the government approaches perfect information, perfect compliance becomes the standard.

At one time, perhaps community banks or other small financial institutions interested in keeping customers around could’ve provided resistance to this by generating political pushback or work-arounds for customers.

However, government policies have effectively destroyed a more decentralized network of financial institutions. Since the early 1990s the number of small banks has fallen from over 10,000 to below 5,000. Now politicians are proposing to leverage their relationships with the few big players who are “too big to fail” to examine every aspect of Americans’ finances.

Especially with the lockdowns, the federal government already has small businesses, independent contractors, and the economy in general in a stranglehold. This new “Information Reporting Regime” will only tighten its economically lethal grip.

Obviously, this is far more than finanicial.

Everyone has something, everyone has broken some law, everyone has had some transgression somehow, someplace, somewhere.

Giving the Government legal carte blanche to comb over your personal, travel, financial, posting, surfing, sexual, educational, professional, employment, entertainment, or any other history with a fine tooth comb and compare it every law in the Federal Register to look for violations (something I am certain they can do with AI now or in the near future) and prosecute at their pleasure.

Beria, the head of Stalin's State Security is famous for having said "Show me the man and I’ll find you the crime."

That is not only exactly what this is for, this is where we are headed. And believe me, this will be far more encompassing, invasive, and tyrannical than anything Stalin, Beria, Mao, Castro, or Xi could possibly dream of. And all of them, most of all Xi, can dream of a lot.

Technology, cheap storage, high speed networks have been things most people in the last 40 years have clamored for, and those things have indeed improved our lives in countless ways. But that said, those wonderful things, when paired with ubiquitous cameras and surveillance equipment, access to all that information mentioned above regarding your current and historical information, brought together by people who have amply demonstrated they are no different than the East German Statsi circa 1981, is a chilling and frightening prospect indeed.

Over the last decade or two, I have often thought of Winston Churchill's famous passage in his "Finest Hour" speech:

"...But if we fail, then the whole world, including the United States, including all that we have known and cared for, will sink into the abyss of a new Dark Age made more sinister, and perhaps more protracted, by the lights of perverted science..."

It is that "lights of perverted science" that has really been eating at me

When you have a country like Communist China (being promoted as something America should emulate by many Americans including many high in our government in this administration) who, by 2022-2023 is expected to have one state operated video surveillance camera for every two citizens, partnering with Google, which shapes and forms the "facts" meted out to billions of people every single day, that should give us serious pause.

Those "lights of perverted science" were not even a faint future gleam in June of 1940.

Today, those "lights of perverted science" are not only are they a reality, we are currently being crushed by them, and this is only the beginning.

Our Founding Fathers knew all too well that human behavior was inherently and unavoidably flawed, and innocently placing trust and power into the hands of people who promised to handle that power benevolently was not only a pipe dream, but it was something the entire American Revolution was based on fighting, and the Constitution was exquisitely constructed to prevent: The power of an overbearing government being concentrated in the hands of people and giving them the ability to tyrannize people.

Do they really mean $600 and not $600k? This seems absurd.

Yes, they really do mean $600. This has been a long term dream of the Washington elites. They want to see every business transaction, and every personal transaction people make.

A few years ago they were trying to make businesses file 1099 forms for every payment they made, even to other businesses. That idea luckily was defeated by Republicans. If it had passed every business in the country would have had to send out 1099 forms to the IRS and the other businesses for everything they bought. Imagine the accounting nightmare that would have been. You would have to figure out in January how much money your business spent in total (subtracting any credits or returns of course) with Staples, United Airlines, Home Depot, McDonalds, the corner hardware store, etc. And then gather their taxpayer ID numbers and the exact corporate identity that you ended up paying. But that's not so simple. In the case of the McDonalds restaurants where you bought coffee for your crew on the way to the job the owner might be a franchisee, or some LLC, or McDonalds corporate. Each would get a separate 1099.

This scheme is trying to directly get that information from banks. It puts a big burden on them, and on businesses and individuals. Everyone will need to track and keep records for every deposit they make.

At some point structuring transactions to be under the limit will become illegal, and then you'll have to be able to prove that you didn't deposit $570 from your yard sale that brought in $610 because you were trying to avoid depositing $610. You'll need the receipt for the $40.00 tip to the guy who hauled away the trash after the yard sale for that.

This kind of scheme is unlikely to do anything useful other than unfairly burden businesses and individuals.

Did you write this? If so, very good post, and very true. the Bible speaks about the great delusion that the whole world falls for in the end times, and that de,usion may very well be that people beleive that big totalitarian government is what we should have.

There is a,push by the gov right now to paint conservatives as dangerous, as domestic terrorists, and I. The end times, the peol,pool, will be clamoring for their governments to clamp down on the ‘radicals’ who resist, and we are seeing th3 government, iteral divide people by getting the vaxed to despise the unvaxed. (It’s so bad that some are now demanding that they be allowed a “booster shot” now before its even been reviewed. They are so afraid and angry at the unvaxed that they are willing 5o risk their own health to comply with the government and be In Their good graces before the crap hits the fan)

We are In a very very bad place in this country right now- tettering on the edge of communism/marxism. And sadly many sheep are clamoring for us to go over the edge stright into the hell of marxism. Far too many people want to be dominated by overlords. It reminds me of Israel begging God to be ruled by kings ‘like all the other nations around them were. God reluctantly allowed them their wish, and they suffered terribly for it most of the time.

What is the solution to the bank issue? One not so good answer might be to take money out and buy gift cards to purchase with online, but I thi k those onl6 go up to $500 per card? If I could purchase several that had 1000’s in it I’d take all my money but $599 out of the bank, and just use gift cards where possible.

I dunno, sadly 5he world is demanding to be ruled by kings again.a I’d that will be the demise of our sovereignty

"...may very well be that people believe that big totalitarian government is what we should have..."

This is what frightens me most of all.

That there are Americans who really believe that. Many of them are Democrat (though not all, for certain) and there are a good number who reside in the top levels of our government in all branches.

There is an outstanding book I read recently by Gen. Robert Spalding (Ret.) called "Stealth War". I read a white paper he wrote on Communist China, in which he states that there are many people who believe the American Experiment was right for the 19th and 20th centuries, but they feel that the Chinese Communist model is right for the 21st Century. (He does not believe this, he is saying many, including the Chinese Communists and their allies believe this)

Appalling, in its truth.

There will always be tyrants. As long as humans exist, we will have to battle people who want to dominate others, take their wealth, their freedoms, and their lives. That is human nature, and that is just how it is. That is something that cannot be solved, in my opinion, it will always have to be borne until the end of time.

But when ordinary people, unknowing people, uneducated people, intellectually lazy people, or ideologically driven people at all levels and classes will willingly accept a yoke thinking it is going to be an improvement...well, THAT is what really frightens me.

Here’s my take on spying the NSA federal government. google Facebook whoever right?

Well the first thing you have to have is somebody( a human being at some point) willing to sit at a computer and try to monitor with somebody else is doing.

No of course !!! there’s law enforcement and terrorism. and all kinds of good reason why we ( the good guys )need to collect info on certain individuals. And Sometimes charge and prosecute and execute them!!

But for the most part most of us lead relatively innocuous boring lives and a great more attention is usually spend in an individual’s life trying to garner attention for oneself rather than try to spy on what somebody else is doing

The classic example of this is peoples interest in the Hollywood elite and they are goings on

But come on now

Listening to your. YOUR Conversations?

Who the heck is going to be interested in that really

There is so much information and entertainment media now with iPhones and iPads and everything

That frankly you have to exercise yourself away from screens !!! at least half of your WAKING HOURS !!! B. or you’re simply wasting your life!!!!

I’m serious

Keep in mind that human beings have been on this planet for many centuries and there was no electronics for 99.999% of that history

Take a walk - read a book - go to the park Have a picnic.

watch a movie - oops ! that’s screens

My point is. Worry less

Cheers !

Truth over power

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