united-states tax-law
Filing US tax returns over bank account-related interests
<p>I do know that in the US, bank-account interests are taxable as passive incomes, but what I don't understand is the point of filing tax returns on bank account interests, since the government (or the IRS), or whatever, has access to bank accounts and can directly deduct taxes (not seizing, I'm not talking about unpaid taxes or fraud istances), without henceforth requiring a tax return filing, since they could deduct the money themselves.</p>

<p>The "point" of including bank-interest income on your tax return rather than having the government automatically deduct what it feels that you would owe is that the government is not legally empowered to take money away from you in that fashion. The government is legal empowered to compel you to pay your taxes, and there are numerous rules enacted as law or as a consequence of laws passed. You can read the various relevant laws <a href="https://www.law.cornell.edu/uscode/text/26" rel="nofollow noreferrer">here</a>. There simply is no general law that says that banks must withhold taxes on interest. There might be a specific case when an entity is subject to <a href="https://www.irs.gov/businesses/small-businesses-self-employed/backup-withholding" rel="nofollow noreferrer">backup withholding</a> (as a response to a taxpayer not following certain rules). There are also special rules regarding non-resident alien withholding, which could require interest withholding. Apart from the intrinsic political unpopularity of imposing new withholding requirements on people, it is difficult to compute the correct amount to withhold, since not all interest is taxable. In theory, a set of rules could be constructed to require withholding of interest income, if Congress were to pass a law similar to <a href="https://www.law.cornell.edu/uscode/text/26/3402" rel="nofollow noreferrer">26 USC 3402</a>.</p>
