/Biden and Dems Seek to Monitor the Bank Accounts of Americans

Biden and Dems Seek to Monitor the Bank Accounts of Americans

The Democrats’ budget plan for $3.5 trillion includes monitoring gross inflows to and outflows from American bank accounts. This raises concerns that the federal government might be violating the 4th Amendment.

“The proposal would require banks to report to gross inflows and outflows to the IRS, including transactions from Venmo, PayPal, crypto exchanges and the like in an effort to fight tax evasion,” the Daily Mail noted, adding, “The IRS would know how much money is in an individual’s bank account in a given year, whether the individual earned income on that account and exactly how much was going in an and out.”

Patrick Hedger (Vice President of Policy at Taxpayers Protection Alliance) slammed the idea. He stated, “The IRS, first and foremost, is a law enforcement agency, and the Fourth Amendment protects against unreasonable search and seizures in pursuit, of looking for, wrongdoing, and criminal actions, so this is going to run into severe Fourth Amendment headwinds.”

He also added:

You’re going to push more folks into small cash transactions, you’re going to push more banking offshore … the big fish out there that do have sizable assets that are that are eligible for taxation offshore. This is the ultimate regressive tax. You’re going to end up punishing the worst off among us … the lower income folks in this country have historically been the targets of aggressive IRS audits because they don’t have the CPAs and the lawyers to be able to fight back.  I don’t see why they need to be going after people, you know, just the average, the average Joe and start stooping on, you know, a $600 payment. It doesn’t make any sense, these, this is, I mean this is beyond trying to pick out low hanging fruit.

The group, which included the American Bankers Association and the Bank Policy Institute, as well as the Consumer Bankers Association , wrote for the Senate Subcommittee on Finance.

This proposal will have real costs, not only for government, but also for financial institutions, small businesses, and individual taxpayers. … Considering all the existing tax and other compliance reporting responsibilities already borne by the financial services industry, we have serious reservations regarding the efficacy of yet another reporting requirement.

… assuming taxpayers have a responsibility to “reconcile” whatever information is provided to them and the IRS by financial institutions, this new reporting structure could create a significant burden on individuals and businesses subject to the requirement – the majority of whom will have nothing inherently suspicious about their returns.

Given the substantial burden that this proposed reporting requirement would create on businesses, individual taxpayers and financial institutions, it is imperative that the benefits of implementation materially outweigh the costs and risk associated with this large scale collection of sensitive personal financial information.

The Taxpayer Protection Alliance published on July 1st a letter protesting the Biden administration’s decision to give the IRS an additional $40 million under the most recent infrastructure agreement. 

They wrote:

While billed by proponents of the deal as beefing up “enforcement,” the agency’s recent actions have given the American people no reason to believe this infusion of funds would be spent wisely. …  

In 2013, the nation discovered that the IRS had targeted certain groups – a number of whom have co-signed this letter – for increased audit scrutiny based on their political beliefs. … In 2017, the IRS settled the lawsuit against them, admitting their actions were wrongful. Despite this admission, there is little indication the IRS has learned its lesson. In just the last month, agency employees illegally leaked the tax information of private individuals to the media. Given the prominence of the individuals whose records were released, there is little doubt this move was politically motivated. …

The new money dedicated to the IRS under the infrastructure plan would involve the agency intensifying their focus on certain groups. Given the agency’s history and even most recent actions, this should concern the nation.

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