Yellen on the IRS $ 600 filing requirement: “There is a lot of tax evasion and cheating going on. “


Treasury Secretary Janet Yellen continues her argument for the Biden administration’s proposal that would require banks to report to the IRS any transaction of $ 600 or more from each customer, insisting it s ‘address to wealthy people while claiming that “there is a lot of tax evasion and cheating going on.”

The White House estimates the plan would raise more than $ 460 billion over the next decade for the federal government through fast-tracking, and the administration is trying to sell the plan as a way to make money. to the rich – although all Americans would. be subject to the rule.

US Treasury Secretary Janet Yellen speaks at a press conference, after attending the G7 Finance Ministers’ Meeting, at Winfield House in London, Britain, June 5, 2021. Justin Tallis / Pool via REUTERS / File Photo (Justin Tallis / Pool via REUTERS / Reuters Photos)

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In a clip released Tuesday night, CBS News’s Norah O’Donnell asked Yellen about the plan, “Does that mean the government is trying to peek into our portfolios if you want to watch transactions? of $ 600? “

“Absolutely not,” replied the Secretary of the Treasury, insisting, “I think this proposal has been seriously misinterpreted. The proposal does not imply any reporting on the individual transactions of an individual.”

Then Yellen explained that there are “individuals” about whom the IRS does not receive enough information.

“Look, the big picture is that we have a tax gap which over the next decade is estimated at $ 7 trillion,” she continued. “Namely, a shortfall in the amount the IRS collects due to an individual’s failure to report the income they have earned.”

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O’Donnell asked, “But it’s among the billionaires. Is it among the people who transfer $ 600?”

“No, this tends to be among high income people whose income is opaque and the IRS doesn’t get information about it,” Yellen said. “If you earn a salary you get a W-2, the IRS knows that. But high income people with opaque sources of income that are not reported to the IRS, there is a lot of tax evasion and of cheating that occurs, and all that is involved in this proposition are some aggregate numbers on the bank accounts – the amount that was received in the year, the amount that went out in a year . “

Yellen then gave an example.

“If someone reports income of $ 10,000 and $ 3 million is taken out of their checking account, that tells the IRS that this is someone you can verify.”

Yellen did not explain the threshold for which the administration would consider “rich”, nor did it rule out attacking employees.

It’s also not the first time he’s been asked why the $ 600 proposal is so low if the IRS is supposedly targeting “billionaires.”

Senator Cynthia Lummis

Wyoming Republican Senator Cynthia Lummis (Photo credit: Fox Business screenshot from Bitcoin 2021 live stream) (Fox News)

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Last month, Senator Cynthia Lummis, R-Wyo., Grilled Yellen over the IRS proposal, telling the Treasury Secretary at a hearing that “the $ 600 threshold is usually not the one where you are going to find the huge amount of tax revenue that you think Americans are cheating on you. “

“That’s right,” Yellen conceded, “but it’s important to have complete information so that individuals can’t mess with the system and have multiple accounts.”

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