Yellen backs IRS reporting $600 transactions to decrease $7T tax gap, supports Omarova nomination

On Tuesday, Treasury Secretary Janet Yellen extended support to the new requirement that says that all purchases above $600 should be reported to the Internal Revenue Services (IRS). She said that it would help the agency to decrease the 7 trillion tax gap. It will also be able to find places where income has been opaque and can be hidden from the tax authorities.

Charles Rettig, who is the Commissioner of the IRS, wants banks to report annual cash flows of all customers. This plan has created an expected backlash by Republicans who call it an invasion of privacy. Treasury Secretary Janet Yellen and many Democrats are in favor of the plan. The House Ways and Means Committee is debating on the issue and might include it in the $3.5 trillion spending bill introducing by the Democrats.

When co-host of CNBC’s Squawk Box Andrew Ross Sarkin asked Yellen about the new collection of information which has been considered as an invasion of privacy by some Americans, she assured the nation that the collection of information was “routine.”

She also commented on the President’s pick to head the Office of the Comptroller of the Currency. Biden has chosen Saule Omarova, a Cornell University law professor. Yellen said that Omarova deserved a fair hearing in the Senate and mentioned that she was an expert in fintech and banking regulations.

She had responded to co-host Joe Kernen when he asked her if the recent nomination of Omarova was an indication that the Biden administration was more financially progressive than their portrayal during their campaign.

Omarova’s nomination has alarmed banking groups as well as fintech companies. She has spoken up against big banks and monopolies including JP Morgan and Citibank. She has also said that there is a need to regulate the cryptocurrency financial system which would make her popular with some Senators including Elizabeth Warren.

Omarova worked in the Treasury department when Republican George W. Bush was the president of the nation. She was a special adviser on regulatory policy to the Under Secretary for Domestic Finance. If she gets nominated again, as a Biden nominee, although she is not favored by the current Republicans, it will be the second time she will serve at the White House.

Image Credit: U.S. Treasury

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