Potential IRS Rule -- Problem for CRHers?

[blueberra]

Part of the American Families Plan Act of May, 2021 is a provision that requires banks to report all transactions that exceeded $600.
This requirement had been part of the Affordable Care Act (Obamacare) of 2012, but was repealed before the law was put into effect.

Further, financial institutions house a lot of valuable information, and indeed already provide third-party reports to the IRS. Leveraging this information?rather than introducing new requirements for taxpayers55?is a proven way to improve compliance.56
55 As part of the Affordable Care Act, a new provision was introduced which would have required businesses to send Form 1099 information returns for all purchases of goods and services over $600. It was set to go into effect in 2012 but repealed six months prior to enactment because of a concern about the burden imposed on small businesses. National Taxpayer Advocate, 2010. ?Fiscal Year 2011 Objectives Report to Congress.?

What does this proposed regulation have to do with coin roll hunting?
My take is that any time someone orders more than $600 of coins (for example, 2 boxes of halves), the bank would have to report that transaction to the IRS. Same story when you dump more than $600.
I can then foresee banks limiting orders for rolls / boxes and enacting some kind of maximum amount that one may dump in the coin machines, since both kinds of transactions would be subject to IRS reporting which would obviously include one?s social security number.

See links below for further reading.
https://www.cnbc.com/2021/09/02/irs...ren-bank-data-can-help-fight-tax-evasion.html
https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf

 

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[Avago]

Seems like it would only be reportable if you're withdrawing from or depositing into your account. And even so, if you're depositing/withdrawing it wouldn't necessarily show unreported income.

In the case of CRH, we basically just re-circulate and re-circulate the same bankroll over and over. Withdraw $1,000, search it, redeposit $999.50 (if you're lucky, ha!)

I'm sure the banks don't want the burden of doing this reporting but I doubt they would impose limits at the risk of turning away customers.

 

[GMan00001]

So if you wanted 6 $100 bills instead of 30 $20 bills or vice versa, would that need to be reported?

I somehow doubt banks will be reporting all of those type of transactions when done in cash. Coins should be similar, but my guess it will vary by bank if ever implemented.

 

[Ohiogoldfever]

Nothing like being shaken down for every penny by the government your tax dollars go to fund. Damn crooks.

 

[smokeythecat]

Well, if you sell anything electronically and get paid by Paypal etc, if the item or items reach $600 you WILL get a 1099 from the gov't starting January. Numerous states already have that rule in effect now.

 

[LooseChange]

So if you wanted 6 $100 bills instead of 30 $20 bills or vice versa, would that need to be reported?

I somehow doubt banks will be reporting all of those type of transactions when done in cash. Coins should be similar, but my guess it will vary by bank if ever implemented.

I think this is right. When you exchange cash for coin or coin for cash, you are not buying anything.
Same should apply if you cash a $650 check.

 

[Johnnybravo300]

Theres no transaction when you buy coins from the bank. You're only trading dollar bills for coins.

 

[CreakyDigger]

Well, if you sell anything electronically and get paid by Paypal etc, if the item or items reach $600 you WILL get a 1099 from the gov't starting January. Numerous states already have that rule in effect now.

I wonder if that will happen. I sell online every day, and the $600 limit is not that large for what we sell. I've never gotten a 1099 from anyone but from some universities who are sticklers about that sort of thing....maybe a couple a year. We've never had one from an individual, or from many auction houses. Certain thresholds will get you one from eBay or Amazon, but their threshold, is, I think, 20K in sales in a year.

 

[smokeythecat]

Ohiogoldfever, I get it, however, I have no power to do anything about it.

Now theoretically, a tax bill like this has to pass both houses of Congress.

Creakydigger, it's already been written into law. Plan wisely.

 

[Phil]

The act only applies to credit cards and third-party network transactions (Paypal).

 

[Treasure_Hunter]

No politics please.

 

[GMan00001]

I wonder if that will happen. I sell online every day, and the $600 limit is not that large for what we sell. I've never gotten a 1099 from anyone but from some universities who are sticklers about that sort of thing....maybe a couple a year. We've never had one from an individual, or from many auction houses. Certain thresholds will get you one from eBay or Amazon, but their threshold, is, I think, 20K in sales in a year.

While you may not have hit the legal threshold in the past or even in 2021, the rules change starting Jan 2022 to the $600 limit without a transaction limit. If you have been claiming all income acquired that way in the past on your income taxes, this won't impact you. If not and you are selling online or getting payments via services like paypal goods and services or selling using sites like ebay, however, you will now get a 1099 in Jan 2023 if you cross the $600 threshold via any one method.

 

[THing4CSA]

Hi My Fellow TH'ers
I do not know about this $600.00 reporting issue. From what I recall it has always been at the $10K level that the banks must report 'Deposits'. This is how one of the employees from the Bureau of Engraving and Printing (BEP) was caught depositing $9K of brand new $100.00 Ben Franklin bill several years ago. The teller got suspicious that a woman was making $9K deposits on a daily basis. Even though the reporting level was not met the daily deposits made the teller call IRS or the FBI. The lady's husband was an employee of the BEP and was able to walk out of the building due to his high level (RHIP) unsearched. The IRS or FBI obtained a search warrant and stopped him in the parking lot. They searched him and his briefcase and found several thousand dollars of new $100. When they searched the trunk of his car they found $14 Million+ of new $100 bills. They then searched his house and found an untold amount of new $100 bills. He was arrested and lost his job, retirement, his house, car, his mother's car and house, and all their possessions. Everything was put up for auction and sold and the funds were returned to the BEP. At trial it was found out that he could not be charged with theft of 'Money' as the $100s were test currency. Once a new print plate is made it has to be tested to make sure everything is correct. The 'Test' money that is printed is then destroyed by being shredded. At the time the shredded currency was being burned to produce energy. Until the printed notes are accepted by the Federal Reserve it is not considered currency. It spends the same and will test the same but is only considered Government Property until it is accepted by the Federal Reserve. He was charged with Theft of Government Property. The max time he could be imprisoned is six months, thus that was his sentence. As soon as he was released from prison (from what I was told) he boarded a plane to Switzerland. I wonder why
One of the awards that I was involved with was to buy a print plate attachment that said 'TEST' in large bold letters. Life goes on! Glad that I am now retired! ;-)

 

[CreakyDigger]

Hi My Fellow TH'ers
I do not know about this $600.00 reporting issue. From what I recall it has always been at the $10K level that the banks must report 'Deposits'. This is how one of the employees from the Bureau of Engraving and Printing (BEP) was caught depositing $9K of brand new $100.00 Ben Franklin bill several years ago. The teller got suspicious that a woman was making $9K deposits on a daily basis. Even though the reporting level was not met the daily deposits made the teller call IRS or the FBI. The lady's husband was an employee of the BEP and was able to walk out of the building due to his high level (RHIP) unsearched. The IRS or FBI obtained a search warrant and stopped him in the parking lot. They searched him and his briefcase and found several thousand dollars of new $100. When they searched the trunk of his car they found $14 Million+ of new $100 bills. They then searched his house and found an untold amount of new $100 bills. He was arrested and lost his job, retirement, his house, car, his mother's car and house, and all their possessions. Everything was put up for auction and sold and the funds were returned to the BEP. At trial it was found out that he could not be charged with theft of 'Money' as the $100s were test currency. Once a new print plate is made it has to be tested to make sure everything is correct. The 'Test' money that is printed is then destroyed by being shredded. At the time the shredded currency was being burned to produce energy. Until the printed notes are accepted by the Federal Reserve it is not considered currency. It spends the same and will test the same but is only considered Government Property until it is accepted by the Federal Reserve. He was charged with Theft of Government Property. The max time he could be imprisoned is six months, thus that was his sentence. As soon as he was released from prison (from what I was told) he boarded a plane to Switzerland. I wonder why
One of the awards that I was involved with was to buy a print plate attachment that said 'TEST' in large bold letters. Life goes on! Glad that I am now retired! ;-)

Great story! The $600 reporting criteria is new, has not yet passed both houses of Congress, I don't believe. But so far amendments to get rid of the requirement have not passed. Here is one article criticizing the proposal.

 

[pepperj]

$600 seems to be a low threshold for any transaction. In Canada it has been the 10K threshold as most states, even the border-going or coming in, it's the 10K.
Show up with 10K though, the red flags are flowing.

In the banking system they have the discretionary policy of reporting or not.
Regular customer-they might ask what was source of the money-sale of car-discretionary call on the tellers part.
They can even report $200 if they feel it's been obtained through something that's not legit. Totally their call if they decide to report or not.
Bottom line if a person wants to be discreet-a box of chocolates goes a long way for others looking the other way.

 

[smokeythecat]

$600 is too low. I am not a dealer in anything collectable. That said, when I sell stuff (not rich you know), when I account for the mileage on the car ALONE I lose $$$. I am not paying taxes on a loss. Gain, no problem. What's a gain? My accountant who charges over $250 an hour said don't get into this trap. It will cost more for accounting fees than I could ever make. AND I got so ticked off at the whole thing Goodwill did very, very well recently. My individual items weren't worth much of anything.

 

[CreakyDigger]

$600 is too low. I am not a dealer in anything collectable. That said, when I sell stuff (not rich you know), when I account for the mileage on the car ALONE I lose $$$. I am not paying taxes on a loss. Gain, no problem. What's a gain? My accountant who charges over $250 an hour said don't get into this trap. It will cost more for accounting fees than I could ever make. AND I got so ticked off at the whole thing Goodwill did very, very well recently. My individual items weren't worth much of anything.

Of course it's too low. The Feds shouldn't be in our bank accounts for any reason.

 

[smokeythecat]

President BIDEN signed this law this past spring. See the article attached.

https://www.cnbc.com/2021/03/26/its...g-the-irs-about-income-from-online-sales.html

 

[CreakyDigger]

President BIDEN signed this law this past spring. See the article attached.

https://www.cnbc.com/2021/03/26/its...g-the-irs-about-income-from-online-sales.html

Yeah, I don't think that's the thing in play here. The article talks about sellers having to report income over $600, and venues like eBay giving them a 1099-K. "Due to a provision in the recently enacted American Rescue Plan Act."

The thread here is about the American Families Plan Act of May, 2021, which is not yet law, and requires banks, not third party vendors, to report transactions over $600.

 

[smokeythecat]

Correct, but best to know in advance of these things.