PPAI has lent its voice to several efforts in recent weeks to push back against a Treasury proposal that would establish a new tax information reporting regime. The Department of Treasury and the proposal’s supporters have responded to this criticism that it was far too expansive with several changes. However, these were largely cosmetic and this week, PPAI joined with almost 100 organizations representing a cross-section of business and financial interests in a letter to the White House requesting that the Biden Administration withdraw the proposal.
The letter notes that the signatories understand that the proposal is a good-faith attempt to ensure all taxpayers meet their tax obligations and they strongly support that goal, but that the overly broad proposal to report gross annual inflows and outflows from nearly every account is disconnected from its purported narrow purpose of focusing government scrutiny on Americans with actual income above $400,000.
Changes announced this week would increase the de minimis threshold to $10,000, and wages and government benefits are excluded from that calculation. The letter points out that “these changes fail to address the reality that any program based on gross annual inflows and outflows will impact Americans from all income levels. Even with the proposed exclusions of certain types of income, a large number of common and totally innocent transactions by individuals and small businesses will be captured by this new regime.”
The letter goes on to urge the Administration to withdraw the reporting regime and consider how the IRS can use its existing authorities to directly focus on those taxpayers suspected of evading their taxes instead of casting such a wide net.
