There has been a significant amount of reporting on language tucked into the Biden Administration’s proposed $3.5 trillion dollar budget proposal that would purportedly require banks to report transactions in accounts with over $600 in annual activity to the IRS. Understandably, gun owners and those who want to exercise their Second Amendment protected rights were immediately concerned.
Does that mean the IRS would be notified of nearly every firearm purchased from a retailer? Would they be notified of large ammunition purchases? How about some of the more expensive accessories?
Such reporting to the IRS could create a de facto gun registry. And a federal list of certain ammunition and firearm accessory purchases.
We can only imagine how this information would be abused by the IRS and the current Administration. But is this reporting requirement actually the case?
Biden’s “$600 reporting requirement” has been extensively reported in two different ways.
Some have said that the requirement would mandate that banks disclose every transaction of $600 or more to the IRS. In other words, the IRS would be notified of every one of your purchases of over $599.
Others have reported that financial institutions would have to report every transaction to and from accounts with a balance of more than $600. Based on some posts and a notice sent out by some local banks, this is the one that got me.
But, neither of these appears to be the actual proposal.
In actuality, the proposal, described in the Department of Treasury’s General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, is stylized “Introduce Comprehensive Financial Account Reporting to Improve Tax Compliance.”
This proposal would require financial institutions to “report gross inflows and outflows with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner.”
The proposal would exempt “accounts below a low de minimis gross flow threshold of $600 or fair market value of $600.”
This does not mean that banks would report on each and every transaction of $600 or more. Instead, banks would be required to disclose the total flow of funds in and out of an account so long as that total was more than $600.
U.S. Treasury Secretary Janet Yellen, during a Congressional Oversight Hearing, stated that the proposal would require the “aggregate inflows and outflows from these accounts each year,” and “not transactional level data.” This would be reported as new fields on the existing 1099-INT form.
Apparently, the IRS has withdrawn the proposal, but Secretary Yellen is pushing for its re-inclusion. Some politicians have remained vigilant in opposition.
What does this mean for gun owners?
It means that, as of today, there is no proposal to require the IRS to track individual purchases. Banks will not be reporting transactions of $600 or more, nor will they be reporting on all transactions from accounts containing $600 or more. Yesterday, press reports indicated that the administration is adjusting their proposal from $600 in annual transactions to $10,000, an amount that would still cover a large percentage of American.
It also appears that the aggregate inflow and outflow reporting is in question and might not be implemented at all.
Even so, we should remain vigilant. The federal government does not have the constitutional authority to monitor the flow of funds in and out of our bank accounts any more than they have the authority to monitor individual transactions.
As the gun community is well aware, these regulatory changes are often a slippery slope. It’s always best to keep your powder dry.
Cody J. Wisniewski (@TheWizardofLawz) is the director of Mountain States Legal Foundation’s Center to Keep and Bear Arms. He primarily focuses on Second Amendment issues but is happy so long as he is reminding the government of its enumerated powers and constitutional restrictions.
To learn more about the Center to Keep and Bear Arms’ work and support their fight for your natural right to self-defense—from both man and tyranny—visit www.mslegal.org/2A and donate today!