My good friend William Teach noted this article:

Biden admin backs down on tracking bank accounts with over $600 annual transactions

by Sarah Kolinovsky and Trish Turner | Tuesday, October 19, 2021 | 5:37 PM

The Biden administration on Tuesday backed down on a controversial proposal to direct the IRS to collect additional data on every bank account that sees more than $600 in annual transactions, after widespread criticism from Republican lawmakers and banking industry representatives, who said the tax enforcement strategy represented a breach of privacy by the federal government.

Instead, the administration and Senate Democrats are proposing to raise the threshold to accounts with more than $10,000 in annual transactions, and any income received through a paycheck from which federal taxes are automatically deducted will not be subject to the reporting. Recipients of federal benefits like unemployment and Social Security would also be exempt.

The IRS would collect the total sum of deposits and withdrawals from bank accounts with more than $10,000 in non-payroll income. Information on individual transactions would not be collected. . . . .

The changes would exempt millions of Americans from the reporting requirement, and help the IRS target wealthier Americans, especially those who earn money from investments, real estate, and other transactions that are more difficult for the IRS to track.

“Under the current system, American workers pay virtually all their tax bills while many top earners avoid paying billions in the taxes they owe by exploiting the system. At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance. This two-tiered tax system is unfair and deprives the country of resources to fund core priorities,” Treasury Secretary Janet Yellen said in a statement.

There’s more at the original.

Mr Teach didn’t use the illustration that accompanied the article, but I will, under Fair Use guidelines, because it illustrates the true nature of the proposed surveillance, which the reporters actually recognized, even if they didn’t say so. It isn’t a measure to go after millionaires and billionaires, but after the poorer people who like to deal in cash.

$10,000 in annual transactions is nothing; that would include everybody but the most destitute. What they are looking for is waitresses depositing tips received in cash, commission salesmen who have to do their own taxes, and any businesses that take in cash for payments. The idea that this is going after landlords is ridiculous: they normally get paid via checks, and that becomes documentation. The ‘billionaires and millionaires’? Their tax returns get closely scrutinized, if not completely audited, every year.

Investment income? Almost always in the form of checks or electronic fund transfers.

Of course, the solution to this is simple: if you receive cash, keep it in cash, and spend it in cash.

Let’s imagine, say, a pole building company, that charges you $10,000 to build a garage. You ask if there’s a discount for cash, and the owner says, “Sure, it’ll be $9,500 for cash.”

So, you pay the guy the $9,500 in cash, and he pays his workers for eight hours on the books, but the overtime in cash. Still looks good to the Infernal Revenue Service, right?

But now, he’ll have two choices:

1. Not accept cash, charge $10,000, plus 6%, or $600, in additional sales tax, and pay his workers entirely on the books, or
2. Take the $9,500, and pay the workers entirely in cash. He’ll have to be careful that his expenses can be covered by other jobs that are on the books.

Good for the government. The guy who has to pay $10,600 for a garage he could have gotten for $1,100 less? Not so much.

This isn’t any measure to go after billionaires; they aren’t buying things with cash or paying people in cash. Their accountants are paying with checks or EFTs, their businesses being paid with checks or EFTs.

Of course, much of President Trump’s support came from the less well off voters, the people who are far more likely to deal in cash, to pay cash, to ask for discounts for cash. The Democrats are going after Trump voters!

Mr Teach wrote:

The fact sheet says, “Imagine a taxpayer who reports $10,000 of income; but has $10 million of flows in and out of their bank account. Having this summary information will help flag for the IRS when high-income people under-report their income (and under-pay their tax obligations). This will help the IRS target its enforcement activities on those who are actually evading their tax obligations—decreasing costly and burdensome audits for the vast majority of taxpayers who pay what they owe.”

Yes, but, it will mean banks have to report your private financial data to the IRS. It won’t say what you purchase, just the overall cash flow.

For the government to delve into your personal finances to see if you are cheating on your taxes, they must have ‘probable cause.’ This surveillance is now going to flag income from which taxes have not been previously deducted as probable cause, when it is nothing of the sort; no one can know whether this stuff will be reported as income on tax forms until the person’s taxes are actually filed, and, in fact, no crime can have been committed until those taxes have been filed.