Key Points
- The Biden Admin and IRS are pushing for banks to provide more account information.
- GOP and trade associations are concerned about IRS overreach.
- The IRS initially asked for information on transactions or accounts with $600 or more.
Giving the IRS more power and oversight isn’t a popular policy position – but that’s exactly what Biden administration Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig are proposing: monitoring any transactions or accounts involving $600 or more.
A huge step down from the current threshold of $10,000.
Yellen and Rettig claim this will help the IRS audit more efficiently (who doesn’t love that?) and that it will generate close to $460 billion dollars over the next decade – that’s cash the Biden administration desperately needs to fund its budget-busting, trillion-dollar Build Back Better plan.
The IRS already has “a wealth of information about individuals,” Yellen said at a recent Senate Banking, Housing, and Urban Development Committee hearing. But she says they still want more information on “partnerships, businesses, [and] high-income individuals who have opaque sources of income that the IRS doesn’t have direct information about.”
Sen. Cynthia Lummis (R-WY) reminded Yellen that a “$600 threshold is not usually where you’re going to find the massive amount of tax revenue you think Americans are cheating you out of.”
“There are obvious privacy concerns for all Americans here and this represents a dramatic new regulatory burden for community banks and credit unions in Wyoming and elsewhere,” Lummis said during the hearing.
Sen. Tommy Tuberville (R-AL) agrees with Lummis – and is taking steps to safeguard private citizens by introducing the Protecting Financial Privacy Act. He calls the Biden administration proposal, “an outrageous intrusion of the government into people’s lives.”
“We want everybody to pay their fair share. I’ve got no problem with that,” Tuberville said. “But I don’t want the federal government, ‘big brother,’ to be harassing private citizens. I don’t want them harassing banks.”
“Most folks have no idea this is part of the Biden plan. So what we’re trying to do is get the information out to the American taxpayer, not just Republicans, but Democrats, too. This should be a bipartisan piece of legislation. I tell you, the Democrats don’t want the IRS any bigger than we do,” Tuberville added.
In addition to GOP pushback, 40 trade associations have signed a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to raise awareness of this potentially disastrous plan.
The silver lining: House Ways & Means Chairman Richard Neal released a statement saying Democrats are regrouping and plan to raise the threshold higher than $600. But how much higher? This initial proposal already shows a complete lack of understanding with regards to who would be impacted by such a dramatic shift.
Will they get it right next time?
