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Privacy Advocates, Bankers Say Biden Proposal Would Turn Banks Into IRS Agents

in News/banking
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By Jimmy Orr, Cowboy State Daily

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.

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Avanti Becomes Second Digital Bank Approved In Wyoming

in News/banking/cryptocurrency
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By Jim Angell, Cowboy State Daily

The nation’s second bank dedicated to handling digital assets and easing transactions between digital assets and the American dollar has won approval to operate in Wyoming.

The Wyoming Banking Board voted 8-0 on Wednesday to approve the charter of the Avanti Bank & Trust, the company announced.

Avanti is the nation’s second digital asset bank to win approval to open in Wyoming. Kraken Financial won charter recognition from both state and federal regulators in September.

Like Kraken, Avanti will have the same powers as a national bank in its approved business lines and will provide several services, including dealing in its own product known as “Avit” to ease the exchange between digital currencies — such as Bitcoin — and dollars.

The bank’s primary job will be to serve as a bridge between digital asset systems and systems that rely on traditional U.S. dollars, said Caitlin Long, Avanti’s founder.

Long, a Wyoming native, was deeply involved in legislative efforts that led to Wyoming becoming the first state in the nation to develop rules to regulate “Blockchain” technology, a digital ledger system.

Her work led in 2019 to legislative approval of a bill allowing the creation of “Special Purpose Depository Institutions” for the handling of cryptocurrency transactions.

Wyoming’s work has made it the only state in the nation where banks working with both digital and traditional assets can operate, Long said in a prepared statement.

“Currently, the only type of U.S. financial institution that can provide final and simultaneous settlement of trades between digital assets and the U.S. dollar—because it is the only type currently approved to handle both within the same legal entity—is a Wyoming special purpose depository institution like Avanti,” she said. “Wyoming has the only U.S. regulator with a bank supervisory and regulatory program for digital assets that is near completion.”

Avanti’s approved products and services include the issuing of Avit and serving as a depository for for digital assets.

The company plans to begin opening commercial accounts in 2021 and will open other types of accounts with high minimum balance requirements soon after, Long said.

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