Treasury Secretary Janet Yellen says it’s absolutely necessary for the Internal Revenue Service to collect data on accounts that have at least $600 in them at any given time in order to best protect against tax fraud.
In an interview with CBS News, Yellen said the proposal has been “Seriously mischaracterized…We have a tax gap that over the next decade is estimated at $7 trillion. Namely, a shortfall in the amount the IRS is collecting due to a failure of individuals to report the income that they have earned.”
The reporter, CBS Evening News anchor Nora O’Donnell, questioned why then the IRS would want to look at accounts with relatively small transactions of $600. Referring to the $7 trillion cited by Yellen, she asked, “but , that is among billionaires, is that among people who transfer $600?”
Yellen responded by admitting, “No, it [the tax fraud] tends to be among high-income individuals who’s income is opaque, and the IRS doesn’t receive information about it. If you earn a paycheck, you get a W-2. The IRS knows about it. High-income individuals with opaque sources of income that are not reported to the IRS, there is a lot of tax fraud and cheating that is going on.”