How a New Tax Proposal Can Improve Tax Compliance Among Businesses
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3 Key Points:
- Tax proposal could close up the use of LLC’s by foreign individuals who provide services abroad which is currently considered foreign income by the United States but often times not taxed in the foreign country.
- A change to the 1099-K to $600 could make an impact on how many LLC’s continue to do this format because a LLC with a foreign owner can’t technically sign a W-9 form to receive payments in the U.S.
- Could have a huge impact on payment processors who will have to file so many more information returns than they do at the moment
Commentary:
A recent new tax proposal could change the bank reporting standards. In this proposal from the Biden administration banks would have to monitor activity from bank accounts that have balances over $600. The proposal is expected to help The Internal Revenue Services improve tax compliance when it comes to taxes owed by businesses. MarketScale asked Crystal Stranger who is an International Tax Director about these potential changes and she believes the proposal’s purpose is to close up international tax shelters.
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