A Stitch in Haste

There’s been some panic-mongering in the blogs over a supposed provision in the housing bill requiring credit card processors to report (or be able to report) all, absolutely all, transactions to the IRS.

That is not correct. The bill includes a

de minimis exception for transactions of $10,000 or less and 200 transactions or less [that] applies to payments by third party settlement organizations.

This is just an extension of the notorious “$10,000 rule” that we already see in other contexts: Withdraw over $10,000 in cash from your bank — it gets reported to the IRS. Buy $10,000 worth of travelers checks — it gets reported. Redeem $10,000 worth of saving bonds — it gets reported. Bring $10,000 in currency across the border — it gets reported. Etc.

Meanwhile, the insistence that any such reporting requirement is an anti-libertarian abomination will of course receive a favorable reception on this blog. No issues there. But let’s acknowledge that if the government is going to demand reporting of financial transactions over $10,000, then there’s no obvious reason to exclude credit card transactions.

On the other hand, there is also no reason for such a provision to be snuck into a housing bill either. See also, “Malden and Chrysler.”

For Discussion: As far as I know, the $10,000 figure is never adjusted upward for inflation, in any of its manifestations. Shouldn’t it be? Or does even asking the question help to legitimize what fundamentally is an illegitimate practice?

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A 13-page Senate “summary” of the bill (whatever happened to the days when an entire bill would be less than 13 pages?) available here. The credit card provision appears on Page 11.

Filed under: Law, Privacy Issues, Updates