This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0641a.WMC
DATE: 1/24/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HM 641 Internal Revenue Service Reporting Requirements
SPONSOR(S): Rommel
TIED BILLS: IDEN./SIM. BILLS: SM 982
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 14 Y, 3 N LaTorre Aldridge
2) Commerce Committee
SUMMARY ANALYSIS
HM 641 urges the Congress of the United States to oppose the Internal Revenue Service (IRS) reporting
requirements placed on financial institutions, small businesses, and law abiding citizens, which are included in
the Biden administration’s tax increase proposal.
Legislative memorials are not subject to the Governor’s veto power and are not presented to the Governor for
review. Memorials have no force of law, as they are mechanisms for formally petitioning the federal
government to act on a particular subject.
The memorial does not have a fiscal impact on the state or local governments. STORAGE NAME: h0641a.WMC PAGE: 2
DATE: 1/24/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
The Biden Administration Revenue Proposals
In the Biden Administration’s proposal released in May 2021, a provision provided the IRS increased
scrutiny over bank accounts.
1
The proposal would require banks, credit unions, and other financial
companies to monitor deposits and withdrawals in accounts that have balances of more than $600 and
submit information to the IRS. Under a revised proposal, financial accounts with money flowing in and
out that total $10,000 or more annually would be subject to additional reporting requirements.
2
In the
current version of the Build Back Better Act passed by the United States House of Representatives on
November 19, 2021, the provision requiring additional reporting by banks, credit unions, and other
financial companies was omitted.
3
Cash Transactions
Reporting current federal law requires a person to report cash transactions of more than $10,000
received in a trade or business.
4
“Person” means an individual, company, corporation, partnership,
association, trust, or estate.
5
“Cash” includes coins and currency of the United States or any foreign
country.
6
Cash also includes a cashier’s check, bank draft, traveler’s check, or money order with a face
amount of $10,000 or less that a person receives for either a designated reporting transaction or any
transaction in which the person knows the payer is trying to avoid a report.
7
Banks and other financial institutions are required to report each deposit, withdrawal, exchange of
currency or other payment or transfer, by, though, or to the bank or financial institution which involves a
transaction in currency of more than $10,000, including cash purchases of cashier’s checks, treasurer’s
checks, bank checks, bank drafts, traveler’s checks, and money orders with a face value of more than
$10,000, to the Internal Revenue Service (IRS).
8
Leak of Tax Return Data
1
General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, United States Department of the
Treasury, May 2021, https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf (Last visited Jan. 13, 2022).
2
FACT SHEET: Tax Compliance Proposals Will Improve Tax Fairness While Protecting Taxpayer Privacy, United States
Department of Treasury, Oct. 19, 2021, https://home.treasury.gov/news/press-releases/jy0415 (Last visited Jan. 13, 2022).
3
Build Back Better Act, H.R. 5376, 117th Cong. (2021) https://www.congress.gov/bill/117th-congress/house-bill/5376 (Last visited
Jan. 13, 2022).
4
Internal Revenue Code (IRC), s. 6050I. Cash payment report helps government combat money laundering, IRS,
https://www.irs.gov/newsroom/cash-payment-report-helps-government-combat-money-laundering (Last visited Jan. 13, 2022).
5
IRC, s. 7701(a)(1).
6
IRC, s. 6050I(d)
7
See IRC, s. 6050I(d) and (f). A “designated reporting transaction” is the retail sale of tangible personal property that’s generally
suited for personal use, expected to last at least one year and has a sales price of more than $10,000, such as sales of automobiles,
jewelry, mobile homes, and furniture, the sale of a collectible, or the sale of travel and entertainment if the total price of the items for
the same trip or entertainment event is more than $10,000. Cash payment report helps government combat money laundering, IRS,
https://www.irs.gov/newsroom/cash-payment-report-helps-government-combat-moneylaundering, (Last visited Jan. 13, 2022).
8
Id. 31 C.F.R. ss. 1010.311 and 1010.313; and 31 U.S.C. ss. 5312 and 5313 STORAGE NAME: h0641a.WMC PAGE: 3
DATE: 1/24/2022
On June 8
th
, 2021, ProPublica published an article which revealed a massive leak of tax return data
from the IRS and brought into question IRS’s ability to protect taxpayer information.
9
The Infrastructure Investment and Jobs Act
The Infrastructure Investment and Jobs Act (Act) was signed into law on November 15, 2021.
10
The Act
adds additional reporting requirements for a broker that facilitates the movement of “digital assets,” or
cryptocurrency.
11
Applicable to returns required to be filed and statements required to be furnished after
December 31, 2023, the Act:
Expands the definition of broker to include “any person who (for consideration) is responsible for
regularly providing any service effectuating transfers of digital assets on behalf of another
person.”
12
A broker is required to file a return with the IRS showing the name and address of
each customer with details regarding gross proceeds and other information.
13
Modifies the definition of “specified security” to include digital assets.
Requires brokers to report transfers of digital assets that are not otherwise subject to reporting
to the IRS.
14
The act also expands the definition of cash for purposes of cash reporting to include digital assets. By
including digital assets in the definition of cash, the Act extends the reporting requirements for
transactions of more than $10,000 in cash to transactions involving digital assets of more than $10,000.
The new reporting requirement requires a person that is currently required to comply with cash
reporting requirements to collect information and report to the IRS details of transactions involving
digital assets, or cryptocurrency transactions, of more than $10,000.
15
Legislative Memorials
Legislative memorials are not subject to the Governor’s veto power and are not presented to the
Governor for review. Memorials have no force of law, as they are mechanisms for formally petitioning
the federal government to act on a particular subject.
Proposed Changes
The House memorial would urge the United States Congress to oppose the reporting requirements
placed on financial institutions, small businesses, and law abiding citizens, which are included in the
Biden administration’s tax increase proposal, and would dispatch a message to that effect.
Copies of the memorial will be sent by Florida’s Secretary of State to the President of the United
States, the President of the United States Senate, the Speaker of the United States House of
Representatives, and each member of the Florida delegation to the United States Congress.
The memorial contains seven whereas clauses. The clauses outline concerns regarding data privacy
and security relating to a proposed expansion of reporting requirements as well as concerns regarding
additional regulations imposed on financial institutions.
B. SECTION DIRECTORY:
9
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
(last visited Jan. 20, 2022)
10
Infrastructure and Jobs Act, Pub. L. No. 117-58 (2021), § 80603, https://www.congress.gov/bill/117th-congress/housebill/3684/text
(Last visited Jan. 13, 2022).
11
Id. IRC, s. 6045(g)(3)(D) defines “digital asset” to mean, except as otherwise provided by the [United States] Secretary [of the
Treasury], any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar
technology as specified by the Secretary
12
Id. IRC, s. 6045(c)(1)(D).
13
Id. IRC, s. 6045(a).
14
Id. IRC, s. 6045A(d).
15
Id. IRC, s. 6050I(d). STORAGE NAME: h0641a.WMC PAGE: 4
DATE: 1/24/2022
Not applicable.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable.
2. Other:
N/A
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES