A number of viral social media posts have claimed that Congress is attempting to pass a bill that would give the Internal Revenue Service the power to track all financial transactions coming to and from bank accounts with more than $600.
The claim is largely accurate: A proposal from the Treasury Department suggests “a comprehensive financial account information reporting regime” to crack down on tax evasion, and would require banks to report the gross inflows and outflows of all accounts for which the total cash flow exceeds $600. In other words, it does not matter if the bank account has less than $600 in it at any given time: If the cash going into and out of the account exceeds $600, the Treasury proposal would require banks to turn certain account information over to the IRS. The required information does not include individual transactions, with the IRS receiving access only to the total inflow and outflow numbers for accounts.
The proposal was part of the Biden administration’s 2022 fiscal year proposed budget and while it is not currently a law, it is being considered as a provision in the $3.5 trillion reconciliation bill currently being debated by Congress.
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