How does a bank know when someone hasn't payed taxes?

Question

If a person had gained 50k in a year and forgot about it and paying tax on it would the bank pick up on that immediately and how do they know whether you've paid your taxes or not?

Let's say I had gained 25 to 50K and then at around the time I have to pay taxes I just took out 35% of it that would be taxed anyway how would the bank be able to tell the difference do most banks have some kind of watchdog system?

Bobbie · Accepted Answer

The banks do not have any thing to do with or about your income taxes BUT they do have requirements that they have to follow concerning the reporting of unusual amounts of certain types of income by some customers during the year for this purpose and time in your life.
Hope that you find the above enclosed information useful. 12/11/2012

rtfm · Answer

The bank doesn't have anything to do with whether you pay your taxes or not.

All the bank does is send a report to you and to the government at the end of the year telling how much you have earned in interest over the year. They don't know, or care, or report, anything at all about how much money you have in your account or how much you have deposited or how much you have withdrawn. That's between you and your employers and the IRS.

Bostonian In MO · Answer

The bank would know when they received a levy notice from the IRS.  They would then drain your account up to the amount on the levy and forward that to the IRS.

Slickterp · Answer

The bank doesn't care if you pay your taxes.  The bank has nothing at all to do with you paying your taxes.

tro · Answer

when IRS puts a lien on the bank account

MaX · Answer

Both bank or IRS can contact you if they find suspicious or high value transactions.

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How does a bank know when someone hasn't payed taxes?

6 Answers