Do we really need the IRS looking over our shoulders every time we deposit a paycheck? The Biden administration has plan to monitor every bank transaction of $600 or more, ostensibly to crack down on tax cheats. But the plan is troubling for a number of reasons. On Thursday, Oct. 7, TPPF joined other conservative groups in a letter calling on members of Congress to block the plan.
Here’s the text of the letter:
The undersigned organizations write in opposition to the proposed new reporting regime to have the IRS collect the account inflows and outflows for bank, loan, and investment accounts as well as Venmo, Cash App, and PayPal accounts. The Biden administration has proposed subjecting every account exceeding gross inflows and outflows of $600 to this proposal while Senate Democrats have suggested a threshold of $10,000. Either way, millions of working-class families including many making less than $400,000 per year will be impacted by this proposal.
This proposal is part of President Biden’s plan to give the IRS $80 billion in new funding over the next decade and hire 87,000 new IRS agents. While Democrats claim they want to go after “the rich” and large corporations, this new reporting regime suggests they will target and harass middle class families and small and medium sized businesses.
Moreover, the reporting requirements impose a burden on banks, the cost of which will be passed on to their customers. It is likely that this cost will be borne most by those at the margin of the banking system, some of whom will be forced out of the system to join the ranks of the underbanked and unbanked.
There are also significant potential privacy violations with this new proposal. The plan could put the data security and personal information of taxpayers at risk at a time that the IRS has repeatedly proven it cannot safeguard taxpayer data.
Several months ago, ProPublica announced that it had the tax returns of thousands of taxpayers stretching back 15 years. This sensitive taxpayer data was either obtained through an unauthorized leak by an IRS employee or through a data breach –either way the IRS failed to safeguard taxpayer information.
Unfortunately, this is not an isolated incident. For decades, the IRS has proven incapable of protecting taxpayer data and acting in an impartial way. The IRS has had multiple, serious security breaches, has had employees leak sensitive taxpayer information to the public, and the agency has been caught discriminating against organizations and taxpayers for political gain.
This malfeasance even extends to existing financial reporting. A2017 Treasury Inspector General for Tax Administration(TIGTA) report found that the IRS routinely skirted or ignored due process requirements when investigating taxpayers for violating the $10,000 currency transaction requirements that exist under the Bank Secrecy Act. The IRS Criminal Investigations Division (IRSCI) utilized this reporting to investigate taxpayers that they suspected may be violating the law.
TIGTA found that most of these investigations were fishing expeditions—just 8% of taxpayers investigated were found to have broken the law. Instead, the inspector general uncovered numerous examples of IRS overreach including violations of the Eighth Amendment and failure to provide the taxpayer of their basic rights including considering reasonable explanations for exceeding the threshold, providing the purpose of the interview, proper agent identification, and that a seizure of their property took place.
The IRS has a long record of failing to do its job and targeting and harassing taxpayers. This proposed new financial reporting regime would provide another way for the agency to target taxpayers or lead to taxpayer data being leaked or stolen. Lawmakers should stand with taxpayers and reject this proposal.
Grover Norquist, President, Americans for Tax Reform
Lisa B. Nelson, CEO, ALEC Action
Bob Carlstrom, President, AMAC Action
Dick Patten, President, American Business Defense Council
Phil Kerpen, President, American Commitment
Brent Wm. Gardner, Chief Government Affairs Officer, Americans for Prosperity
Ryan Ellis, President, Center for a Free Economy
Jeffrey Mazzella, President, Center for Individual Freedom
Andrew F. Quinlan, President, Center for Freedom and Prosperity
Tom Schatz, President, Citizens Against Government Waste
Iain Murray, Vice President for Strategy, Competitive Enterprise Institute
Matthew Kandrach, President, Consumer Action for a Strong Economy
David McIntosh, President, Club for Growth
Katie McAuliffe, Executive Director, Digital Liberty
Jeremy Cerone, CEO, EliteSafe Inc.
Adam Brandon, President, FreedomWorks
George Landrith, President, Frontiers of Freedom
Garrett Bess, Vice President, Heritage Action for America
Jon Caldara, President, Independence Institute
Carrie Lukas, President, Independent Women’s Forum
Heather R. Higgins, CEO, Independent Women’s Voice
Andrew Langer, President, Institute for Liberty
Tom Giovanetti, President, Institute for Policy Innovation
Seton Motley, President, Less Government
Charles Sauer, President, Market Institute
Pete Sepp, President, National Taxpayers Union
Keith Erf, New Hampshire State Representative (Hillsborough 2)
David Miller, Southwest Ohio Center Right Chair
Brandon Dutcher, Senior Vice President, Oklahoma Council of Public Affairs
Tom Hebert, Executive Director, Open Competition Center
Bryan Bashur, Executive Director, Shareholder Advocacy Forum
Saulius “Saul” Anuzis, President, 60 Plus Association
Jim Martin, Founder/Chairman, 60 Plus Association
Lorenzo Montanari, Executive Director, Property Rights Alliance
Karen Kerrigan, President & CEO, Small Business & Entrepreneurship Council
David Williams, President, Taxpayers Protection Alliance
Kevin Roberts, CEO, Texas Public Policy Foundation