Tipsheet

No One's Buying What Yellen Just Told CBS About IRS Proposal

Leah Barkoukis
Leah Barkoukis  |  October 13, 2021 7:00 AM

Treasury Secretary Janet Yellen defended the Biden administration’s plan to have banks report accounts to the IRS with $600 or more, claiming it’s meant to target the ultra wealthy to uncover “tax fraud and cheating.”

The proposed rule would raise revenue to pay for President Biden’s trillions in new spending, but critics say it would target nearly all Americans because the threshold is so low, not the billionaires the government claims to be going after.

During an interview with CBS, Norah O’Donnell asked Yellen whether the plan was a way for the government “to peek into our pocketbooks.”

"Absolutely not,” Yellen claimed.

"Look, the big picture is that we have a tax gap that over the next decade is estimated at $7 trillion," Yellen added. "Namely, a shortfall in the amount that the IRS is collecting due to a failure of individuals to report the income that they have earned."

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"But that's among billionaires,” O’Donnell pointed out. “Is that among people who are transferring $600?"

"No, it tends to be among high-income individuals whose income is opaque and the IRS doesn't receive information about it," Yellen said. "If you earn a paycheck, you get a W-2, the IRS knows about it.  But high-income individuals with opaque sources of income that are not reported to the IRS, there's a lot of tax fraud and cheating that's going on, and all that's involved in this proposal is a few aggregate numbers about bank accounts – the amount that was received in the course of the year, the amount that went out in the course of a year."

No one on social media was buying Yellen's claim.