The proposal, which is being pushed by the Biden administration, would require banks and other financial institutions to report to the Internal Revenue Service (IRS) any deposits or withdrawals totaling more than $600 annually to or from all business and personal accounts.
The American Bankers Association (ABA), along with over 40 business and financial groups, sent a letter on Sept. 17 to House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader Kevin McCarthy (R-Calif.) objecting to the “ill-advised” reporting proposal.
“While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population,” the letter stated.
“In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information.”
The Biden administration has been pushing Democrats to include the proposal in the $3.5 trillion spending bill in an effort to address tax evasion, mainly by wealthy people.
With the new reporting rule, “the wealthy can no longer hide what they’re making,” President Joe Biden said on Sept. 16 during a speech on the economy.
“That isn’t about raising their taxes,” Biden added. “It’s about the super-wealthy finally beginning to pay what they owe.”
The reporting regime aims to close the tax gap, according to the Treasury Department, which is the difference between taxes owed to the government and what’s actually paid.
A report released by the Treasury in May stated that the new reporting rule would help “raise $460 billion over the next decade.”
Almost every banking transaction and even transfers between one’s accounts would be aggregated and reported to the IRS, according to Paul Merski, group executive vice president at the Independent Community Bankers of America (ICBA), which represents nearly 5,000 community banks in the United States.
“It’s a dragnet, it’s a collection of data in the scale that we’ve never seen before in the financial sector,” Merski told The Epoch Times.
ICBA is among the financial groups that strongly oppose Biden’s proposal, calling it an “overreach” by the federal government.
Banks already report a tremendous amount of data to the IRS. According to a U. S. Government Accountability Office report, more than 3.5 billion information returns were received by the IRS for tax year 2018. A large number of these come from banks, AB….