Filing taxes may look different in the future due to a new proposed Tax Information Reporting Initiative

MARYLAND – If you live in the United States, filing taxes isn’t anything new, but a change in the way the IRS might start collecting information has some on their toes.

“If it is a good idea they haven’t done a good job explaining how it’s going to help, it’s just going to make things much more burden for some from businesses that are already suffering in burden coming out of COVID,” Bill Christopher, President and CEO of the Dorchester County Chamber of Commerce, said.

A list of Maryland organizations, including Chambers of Commerce, are opposing a tax information reporting initiative by the IRS.

“It’s going to require your bank to track and submit to the IRS your information on money that goes into your account and out of your account again at the threshold of $10,000,” Bill Chambers, President and CEO of the Salisbury Chamber of Commerce, said.

The objective of the proposal is to target wealthy taxpayers who aren’t paying taxes.

“The original intent of the proposal was if you’re making more than $400,000 a year, the treasure department would use the data collected from this bank reporting scheme to track people who weren’t paying their taxes,” Chambers said.

Adding, this could cause headaches for both individuals and small businesses.

“It’s going to create serious privacy concerns, it’s going to increase tax preparation costs for individuals and small businesses and it’s going to create real significant operational challenges for financial institutions,” Chambers said.

A letter was sent to Members of the Maryland Congressional Delegation by these organizations voicing their concerns. Representative Andy Harris says he agrees.

“I think we should just leave the system on how it is right now, right now if you earn over $600 you get a statement that’s sent to the IRS it’s reported to the IRS, that seems entirely fair,” Rep. Andy Harris said.

While the proposal is still up in the air organizations are hoping their letter makes a difference.

“To make everyone aware that this is problematic and I think hopefully once everybody understands what this is they realize it needs to come out of the bill,” Christopher said.

We’re told this will also just create additional paperwork for people and the IRS will have to hire more people to process this information. And, it’s not clear what the IRS will do with this data.