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Bank leaders share IRS monitoring concerns in House Committee meeting

By Casey Harper (The Center Square)

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

Biden has been seeking for months to bolster IRS auditing to help fund several billion dollars in Democrats’ proposed social spending. As part of that effort, the new proposal in question will require banks to hand over account information to Americans whose bank accounts meet a certain threshold. Initially, that threshold was accounts with $ 600 in transactions, although that threshold can now rise to $ 10,000.

Bankers testified about the proposal, which raised a range of concerns, including privacy and reporting requirements for banks.

“In my 28 years of banking, I have never seen our clients more worried or upset by a policy idea in Washington than this plan to force banks to pass on significant amounts of additional information about our clients to the IRS,” Jim said. Edwards said. , CEO of United Bank in Georgia. “Reducing the tax gap is definitely a goal that is worthwhile, but unfortunately the administration’s approach is simply too broad. And it is my conviction that it will affect millions of ordinary, law-abiding taxpayers and jeopardize their privacy.

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

Democrats argue that the plan will be used to catch rich tax fraud, but critics say it will capture comprehensive data on millions of Americans.

RELATED: President Biden’s tax increases continue

“Despite their demands, Democrats are not targeting individuals with high net incomes or large corporations with IRS oversight,” House Ways and Means Republican leader Kevin Brady of R-Texas said. “They believe it’s families, farmers and small businesses that are cheating their taxes, and that’s the way they believe they can go after them.”

Republican lawmakers also said even with the changes, there are a number of ways Americans can find themselves on the wrong side of the IRS. They point to common activities, such as performance workers who run Uber, sell goods on Etsy or other online platforms, send money to support a child or elderly parent, or carry out large transactions such as car purchases or family vacations, and say everything will probably require you bank to submit information to the IRS.

“In the end, it is still a dangerous invasion of your privacy. “Spending as little as $ 200 a week can cause IRS oversight,” Brady said. “The grocery bill for an average family of four far exceeds the trigger for IRS surveillance. It’s especially scary for hairdressers, plumbers, gig workers and anyone who earns their living outside of a payroll system – they have a big target on their backs. ”

A number of banks, businesses, non-profit organizations and other groups have criticized the proposal. Even after the Democrats proposed raising the threshold to $ 10,000, they remained strongly in opposition.

“If implemented, this new proposal will continue to raise the same concerns about privacy, increase tax preparation costs for individuals and small businesses, and create significant operational challenges, especially for community banks,” said Rob Nichols, president and CEO of the American Bankers Association. “Given the IRS’s recent history, the concerns about privacy and data security for Americans are real and should not be taken lightly. That is why Americans across the country have voiced their strong opposition to this proposal. We firmly believe that everyone must meet their tax obligations, but this blunt tool is not the right tool to solve this problem. ”

RELATED: Democrats consider new taxes to fund trillions in social spending, but critics are cautious

Conservatives point to the IRS Lois Lerner scandal, in which the federal agency has caught up with conservatives. They warn it could happen again.

Last week, Finance Minister Janet Yellen defended the plan.

“The crux of the problem is a difference in the way types of income are reported to the IRS: opaque sources of income avoid regular scrutiny while wages and federal benefits are typically subject to near-full compliance,” Yellen said. “This dual tax system is unfair and deprives the country of resources to finance core priorities. We will continue to work with leaders in Congress to implement this important measure to level the playing field for workers and small businesses, and to increase revenue to better rebuild our economy. ”

Syndicated with permission from The Center Square.

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