The IRS now has access to your credit card records .... part of the Housing Bill

[Watchmann]

Just saw this tidbit of information over at Fox Business News (Alexis Glick blog). 

Buried deep in the bowels of the Housing Bill just signed was the provision that the IRS will now have permission to see all of your credit card transactions. They will be able to tell if you are not filing as much taxes as you should be and using your credit card to spend above the income you put on your W-2. Who will have access to that information? How many people? Do you want the government knowing about your credit card information or credit card numbers? Isn’t that scary?

I wonder why nobody has reported on this?  Wouldn't this be of concern to most people?

[MattH]

---

@Watchmann wrote:

Just saw this tidbit of information over at Fox Business News (Alexis Glick blog).

Buried deep in the bowels of the Housing Bill just signed was the provision that the IRS will now have permission to see all of your credit card transactions. They will be able to tell if you are not filing as much taxes as you should be and using your credit card to spend above the income you put on your W-2. Who will have access to that information? How many people? Do you want the government knowing about your credit card information or credit card numbers? Isn’t that scary?

I wonder why nobody has reported on this? Wouldn't this be of concern to most people?

---

This is not new, and it doesn't involve the CRAs, it involves the credit card companies. For years the IRS has been forcing Visa, Amex, etc., to provide them with transaction data. However, they are not going after folks who are simply spending a lot, their primary focus is looking for signs that people are hiding money in offshore bank accounts. Also, Homeland Security mines such transaction data looking for terrorists.

Message Edited by MattH on 07-31-2008 06:52 PM

[Anonymous]

Yeah, I didn't think it could be for income purposes ... I mean, after all, what are you supposed to use to pay the cards off? Your income, right?

So how does borrowing money on credit = more income?? If anything, I'd think that would be equivalent to LESS income (interest rates, APRs, etc).

Now, if they wanted to start monitoring CRs to see about "extra income" in the form of defaulted credit products ... that I could understand. Because technically, that WAS more income and wasn't taxable, per se.

Message Edited by Wonderin on 07-31-2008 09:23 PM

[Anonymous]

By terrorist you mean themselves?

[Anonymous]

People who are living off of savings, whether it's because they are retired or because they are between jobs, will have spending that far exceeds their income.

Many people even plan for such a scenario and sock away a certain amount to live on in case the income dries up for a while.  That's not fishy, it's just being financially reponsible.

In any case, even those without a lot of savings sometimes rack up huge amounts of CC debt.  That doesn't mean they have the means (or the income) to pay it.  While such behavior may not be financially responsible, that doesn't mean there's anything fishy about it, either.

Message Edited by cheddar on 08-01-2008 11:41 AM

[haulingthescoreup]

I keep insisting on knowing whence the stats derive for "credit card debt." (Goodness, such fancy words.)

I would not be a bit surprised to find that they are looking at the balances reported to the CRA's each month. And as all of us know, that figure includes amounts that are promptly paid off. The overwhelming majority of Americans have never heard of paying off CC balances before they report. They do the normal thing, wait for the statement to drop, and pay the balance. That's NOT debt.

Now if they have found a way to track UNPAID balances for each month, I will respectfully back off.

[marty56]

According to my evil twin, here are some of the things the IRS could be looking for.

Unreported income by charging more on  CC then monthly income

Tax cash advances

Tax 0% BT

GST tax (just like Canada)

Tax on Internet purchases that arent allready taxed.

Tax on PFD settled less then owed (like BK I think)

Validating Business purchases that are are reported.

Prelude to IRS Visa card.  Dont EVER leave home without it.

[MattH]

---

@marty56 wrote:

...Tax on Internet purchases that arent allready taxed...

---

Naah, the IRS could care less about sales tax, those are a State thing. The difficulty of reaching a national consensus on how to handle sales tax on Internet purchases is precisely because high-tax States and low-tax States have such different views on the matter.

[Anonymous]

Credit card companies.
Playing with too many BTs can get you on that list. They are looking for money laundering. I have seen them freeze funds and investigate from people for too many BTs. Moving around money too often can be an alarm. Doesn't matter if you are in debt up to your eye balls. Trigger is a trigger. Usually settled with in 20-35 days and all returns to normal. But your info was sent to IRS I am suspecting too.

Banks
I have been reported by my bank for BT deposits a few times. The teller said I have to report this. I didn't really know what that was about so I said what ever. The next time I went in to the bank they said we have to report this to the IRS. Ok what ever. Both amounts were just over $5k. I keep super great records of all banking transactions should the IRS ever want to see anything. But my paper trail is so plain and easy to understand clearly I don't think they would be calling me in. But never know. I can show for everything. Just heads up when you play with BTs. Keep all records.

But I thought when ever we write checks too the IRS or some part of government gets a copy of the image amount of the check with in the 2 days of processing. Whether the IRS or what ever part of government they have been watching for a long time. That is no secret. It might not be a human but some computer somewhere is monitoring your banking activity.