A controversial provision contained in President Joe Biden’s infrastructure plan that would give the Internal Revenue Service much more information about citizens’ personal finances is causing concern in Wyoming and on Capitol Hill.
The provision would require banks to report nearly every customer’s transaction of $600 or more to the IRS. Further, taxes would be increased to fund $78 billion toward enforcing the new measure.
The goal, according to Biden and supporters, is to make sure people pay what they owe in taxes, but Andy Miller, president of Sundance State Bank in Sundance, said he has a problem with how that would be accomplished.
“We are strongly opposed to this legislation,” he told the Sundance Times. “We believe it infringes on personal and business privacy.”
Scott Meier, who represents the Wyoming Bankers Association, voiced the same concern over privacy issues in a column he penned for Cowboy State Daily earlier this week.
He said every bank and credit union would turn into an IRS agent under the provision.
“This surveillance dragnet will capture every single American — from all income levels — with a bank, credit union, brokerage or financial account,” Meier said.
“Not only is this proposal a huge violation of privacy, but it is also an egregious abuse of Americans’ right to due process by inferring that all U.S. taxpayers are guilty of evading taxes until proven otherwise,” he said.
As an example, Meier said if someone were to transfer $15,000 from their savings account to purchase something they had been saving for — like a wedding or a car — their bank would be required to report the activity to the IRS where it could be flagged for an audit.
“Despite the fact that you have done nothing improper or illegal, any ensuing IRS activity would presume you guilty until proven innocent,” he said.
Where the newly-gleaned information would go resulting from this act is one of many concerns for David Pope, the founder of a multi-state accounting firm based in Wyoming.
He said as soon as the personal financial information is turned over to the IRS, it could end up anywhere.
“If there is anything we learned over the last 4 years or so, Congress at the very least feels they have an absolute right to anything the IRS has in its files,” Pope, president of DAPCPA Inc. said. “They can then use that information for political gain.”
He said the agency doesn’t have a good track record in place with the existing information they already acquire. More information would lead to more problems, Pope said.
“The chance of the IRS misinterpreting this information is tremendous, which could create millions of man-hours spent trying to fix problems from the misinterpretations. It is almost as if the administration is setting up a situation where people receive notices that they just pay because they do not have the time or the means to fight the IRS,” he said.
Both U.S. Sen. Cynthia Lummis and U.S. Rep. Liz Cheney have spoken up against the measure. Lummis said it “undermines” the 4th Amendment’s guarantee against unreasonable search and seizure, while Cheney said the provision would “weaponize the Democrats’ radical agenda”.
“The Biden Administration’s proposed intrusive IRS surveillance of bank accounts with $600 or more violates the rights and privacy of American taxpayers,” she said.
On Friday afternoon, Bloomberg reported there may have been some movement on the changing the threshold amount but it was too early in the process to count on it.