Bank Leaders Share IRS Monitoring Concerns In House Committee Meeting

Casey Harper (The Center Square).

House Republicans held a public meeting Tuesday to invite banking leaders to share their feedback on President Joe Biden’s proposed IRS monitoring program.

For months, Biden has looked to beef up IRS auditing to help fund several trillion dollars in Democrats’ proposed social spending. The new proposal would mandate that all banks give account information to Americans who have bank accounts that meet certain criteria. The threshold for accounts that had $600 of transactions was initially set at $10,000.

A number of issues were raised by banks when bankers gave testimony about the proposal.

“In my 28 years of banking, I’ve never seen our customers more concerned or upset by a policy idea in Washington than this plan to force banks to turn over significant amounts of additional information on our customers to the IRS,” said Jim Edwards, CEO of United Bank in Georgia. “Reducing the tax gap is certainly a worthwhile goal, but unfortunately the administration’s approach simply casts too wide a net. And it’s my belief that it’s going to affect millions of ordinary, law-abiding taxpayers and put their privacy at risk.

“It will also impose new costs on community banks like ours, and more importantly damage our bank-customer relationships that we have worked so hard to build at our bank over our 100-year history,” he added.

Democrats claim the plan is used to capture wealthy tax cheats. But critics argue that it could be used for massive data collection on millions of Americans.

RELATED: President Biden’s Tax Hike Hits Keep On Coming

“Despite their claims, Democrats are not targeting high-net income individuals or big corporations with the IRS surveillance,” House Ways and Means’ Republican Leader Kevin Brady, R-Texas, said. “They believe that it is families, farmers, and small businesses who are cheating on their taxes, and this is the way they believe they can go after them.”

Republican lawmakers also pointed out that there were still many ways Americans could find themselves on wrong side of IRS, despite the recent changes. Common activities such as Uber drivers, Etsy sellers, and sending funds to an elderly or child to help them, as well as large transactions like car purchases and family vacations are all examples. All of these will require information from your bank.

“In the end, this is still a dangerous invasion of your privacy. As little as $200 a week of spending could trigger IRS surveillance,” Brady said. “The grocery bill for an average family of four well exceeds that trigger for IRS surveillance. It’s especially frightening for hairdressers, plumbers, gig workers and anyone who earns their living outside a payroll system – they’ve got a big target on their back.”

A variety of organizations, including banks and businesses, have criticised the plan. Even though Democrats proposed raising the threshold to $10,000 they remained staunch in their opposition.

“If enacted, this new proposal would still raise the same privacy concerns, increase tax preparation costs for individuals and small businesses, and create significant operational challenges, particularly for community banks,” said Rob Nichols, president and CEO of the American Bankers Association. “Given the IRS’s own recent history, the privacy and data security concerns for Americans are real and should not be taken lightly. This is why Americans from all walks of the country strongly opposed this proposal. We firmly believe that everyone should honor their tax obligations, but this blunt instrument is not the right tool to solve this problem.”

RELATED: Democrats Consider New Tax To Fund Trillions In Social Spending, But Critics Are Wary

Conservative groups point out the IRS Lois Lerner scandal in which the federal agency was found targeting conservative groups. These groups warn that this could occur again.

Janet Yellen (Treasury Secretary) defended this plan last week.

“At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance,” Yellen said. “This two-tiered tax system is unfair and deprives the country of resources to fund core priorities. We will continue to work with leaders in Congress to enact this important measure to level the playing field for workers and small businesses, and raise revenue to build our economy back better.”

Syndicated with permission from The Center Square.