Democrats raise proposed IRS bank reporting threshold to $10,000 from $600

WASHINGTON, Oct 19 (Reuters) - Senior Democrats in Congress have agreed to raise their proposed tax reporting threshold for bank account inflows and outflows to $10,000 a year, with exemptions for wage income, from an earlier proposal of $600 that drew criticism for being too intrusive.

U.S. Senate Finance Committee Chairman Ron Wyden on Tuesday said the new $10,000 Internal Revenue Service reporting threshold, to be included in Democrats' sweeping "reconciliation" social spending and tax hike legislation, was chosen after consultations with the U.S. Treasury because it is a level frequently used in other bank reporting requirements.

These include requirements for banks to report daily aggregate cash transactions of $10,000 or more under anti-money laundering rules.

Democrats' initial proposal for banks to report inflows or outflows of bank accounts of more than $600 annually drew sharp criticism from Republicans for targeting tiny transactions and opposition from banking and other lobbying groups who charged it would raise financial privacy concerns.