One step at a time

[digitalpoetry]

I don't have the full details handy, but there's a bit of legislation attached to the $300 billion housing bailout bill that will require credit card companies to send the details of every transaction made to the IRS. It's like warrantless wiretapping for your spending habits. How far do we let this go

Comments

[lexelby]

Okay, this worried me enough that I decided to do some research. The part of the bill that this is coming from is page 615 of this PDF: http://banking.senate.gov/public/_files/AYO08900_xml.pdf

Here's the key bit:

(a) IN GENERAL.-Each payment settlement entity shall make a return for each calendar year setting forth-
(1) the name, address, and TIN of each participating payee to whom one or more payments in settlement of reportable transactions are made, and
(2) the gross amount of the reportable transactions with respect to each such participating payee.

That says payee, i.e. the merchants taking credit card (and debit card, I think) transactions. It says the credit card company has to send a list of all merchants who've taken CC payments, and for each one, the total amount of money they accepted in the transactions. I gather that this is for tax compliance purposes, which will increase the amount of taxes collected and help fnd other parts of the bill.

Unless there's something I'm missing here, there's a lot of uproar over nothing important, and most people seem to have it wrong.

I went and watched Ron Paul's video on this, and he says, "...all credit card transactions will be reported to the IRS..." and "...every transaction will be reported to... to the IRS." The first is technically true, and the second is perhaps true if you're lenient. All transactions WILL be reported... in aggregate. Individual transactions won't. Ron Paul is either distorting the facts so that he can draw people in (much like the mainstream media does), or he simply misunderstands the bill.

Oddly enough, this actually WILL affect me directly. Paypal will now have to report my withdrawals to the IRS if I make over $10000 per year in SL (which I did last year). I will need to get a taxpayer ID number for my business if I want to avoid giving paypal my social security number; they need one of those two to file this information. On the plus, it'll save me adding the withdrawal numbers up myself ;) Details here: http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9103858

[digitalpoetry]

Thanks for looking into the details - I agree that's not really as worrying as it sounded.

I suspect that Ron Paul is concerned mainly because he doesn't think we should have the IRS at all, so he doesn't see giving them more power to collect as a good thing. I don't entirely agree - as long as we DO have the IRS they might as well collect as much as they're supposed to, I guess.