Credit and debit card transactions are already being reported to the Internal Revenue Service, as of a couple of years ago. Personal checks and cash are not readily reported or taxed, however. And until all companies are in compliance with payroll/accounting software and tax withholding requirements, the Internal Revenue Service could establish a relationship with all banks and/or require that all banks deduct proportional income taxes from all personal checks and deposited cash.
This would shield individuals, from indigent to wealthy persons, whose employers do not at current deduct taxes from their pay. It would eliminate episodes of “tax evasion,” as taxes deducted from personal checks and cash (with the exception of cash that is demonstrably from already taxed income of account holders and/or depositors or cashers) would be instantaneously/electronically sent from banks to the Internal Revenue Service (Tax deductions and instantaneous payment to the Internal Revenue Service would also apply to all check cashing and other companies that provide check cashing services).
Alleviation of Minimum Balance Requirements on Business Bank Accounts
Substantial minimum balance requirements on business bank accounts perhaps significantly account for reasons that some especially smaller and/or newly beginning companies might not open business bank accounts, which help business owners to better manage their business finances, and could allow for instantaneous collection of business taxes by banks for instant remittance to the Internal Revenue Service.
Bank-Produced W-2s and Tax Filing Services
In alignment with such a system as the proposed, banks would produce printable electronic W-2 forms and offer tax filing services to account holders, for determined fees. Tax filing services, including rapid refunds, etc. and fees would be competitive with those of traditional tax companies.