IRS Pushes for New Reporting at Expense of Privacy

angelheaded writes "Brian Krebs from the Washington Post is reporting that the Bush administration is proposing a new tax collection program that would force credit card companies to report merchants' income to the Internal Revenue Service. The plan has come under fire from privacy groups, who say it will create another private sector database tied to Social Security numbers at a time when ID theft experts are urging companies to wean themselves from the use and collection of such information."

Comments

What's the big deal?

[surmak]

According to the article, the IRS is only asking the banks to report the IDs of those receiving money from credit card transactions. Your purchases are not reported, only the aggregate of all the purchases of a business. This information will help to locate tax cheats. I would have a serious problem if the IRS got a list of where every consumer made a CC transaction, but that is not the case here.

The privacy issue is not a concern either. Even if it is a small business using the owner's SSN the IRS already has that info on tax forms, W2s, and other data they get from banks. This personal information will not be shared with anyone outside the IRS anymore than one's 1040 is.

Re:Worthless data...

[Col. Klink (retired)]

Small business owners file 1040 Schedule C. Pari I, line 1 is "Gross receipts or sales."

I don't get the problem

[cliffski]

I'm not american, but don't understand the outrage. surely this is an attempt to 'catch' those people who are making a fortune selling stuff on ebay etc, without ever declaring the income through their business or paying any corp tax.
As a small businessman who pays every penny of tax as I should, I'm behind any method that helps catch those swine who can undercut me by not paying any tax.
Since when is it cool to stick up for tax cheats?
What am I missing?

Re:Surprise?

[sumdumass]

You know, I don't see how this is any different then requiring an employer to submit a 1099 for contract workers and other similar paid people. I mean the changes are so it reports the total amount of sales (income) a merchant or business owner has made through a credit card account. It would almost be the same as the card companies issuing a 1099 to the merchants.

The call to arms about social security numbers is a little weak too. I mean it isn't like the US government (IRS) doesn't already have the numbers when anyone else does a 1099 or they report their own income. All that would be necessary is for another field in an existing database to be set with a "credit income" tab or something and treat it like all other IRS information.

The people who are really at risk here are the ones who sell things on line and don't report it to anyone. That is why there is a big problem with it. Now, If your going to be doing any business with people paying you by credit cards, your going to have to report it in some way. The fact that small businesses use their SS number as their TIN number is sort of irrelevant, the IRS would already have that information anyways. The credit card companies would already have that information stored for a year or more anyways too. The only difference now is whether the government gets information on the amount of sales you do by credit cards or not. That is the only material change in this.