- The Senate rejected a measure introduced by Finance Committee Ranking Member Mike Crapo that would have prevented the IRS from having access to Americans’ private banking records.
- “The IRS financial institution reporting requirement forces financial institutions to turn over detailed bank account information to the IRS based on vague and ‘flexible’ criteria, such as a $600 threshold and account inflows and outflows, which are determined by the IRS,” Crapo said in a statement.
- The budget resolution making its way through Congress would provide the IRS with $80 billion in additional funding over the next decade to hire 87,000 more workers in an effort to prevent tax avoidance.
The Senate on Tuesday rejected a measure introduced by Finance Committee Ranking Member Mike Crapo that would have prevented the Internal Revenue Service from having access to Americans’ private banking records.
The rule, which Crapo proposed as an amendment to Democrats’ $3.5 trillion budget resolution, was narrowly defeated 50-49 in a party-line vote. It would have prohibited President Joe Biden’s administration from requiring financial institutions to report all transactions on accounts with a balance of more than $600.
“The IRS financial institution reporting requirement forces financial institutions to turn over detailed bank account information to the IRS based on vague and ‘flexible’ criteria, such as a $600 threshold and account inflows and outflows, which are determined by the IRS,” Crapo said in a statement.
“This time-draining burden disregards banking privacy in order to squeeze more resources out of responsible Americans and entrepreneurs,” he continued. “It subjects law-abiding Americans to more intense targeting from the IRS and additional data collection, a concern that was recently amplified by a leak of private taxpayer information out of the IRS.”
In June, investigative news outlet ProPublica obtained a vast amount of federal tax data of several extremely wealthy Americans. IRS Commissioner Charles Rettig warned that if an agency official was responsible for the leak, they would be prosecuted. (RELATED: EXCLUSIVE: Reps. Jordan, Issa Demand Transparency From IRS Over ‘Partisan’ Leak Of Tax Records)
While the White House condemned the illegal leak of tax information, it also criticized the individuals whose tax information was leaked for evading taxes, touting Biden’s plan to increase funding for the IRS.
“There is more to be done to ensure that corporations, individuals who are at the highest income are paying more of their fair share, hence it’s in the President’s proposals, his budget, and part of how he’s proposing to pay for his ideas,” White House Press Secretary Jen Psaki said in response to the ProPublica report.
The budget resolution making its way through Congress would provide the IRS with $80 billion in additional funding over the next decade in an effort to prevent tax avoidance. Much of the funding will go toward hiring roughly 87,000 new workers, Politico reported.
The regulation targeted by Crapo’s amendment was introduced as part of the broader goal to clamp down on tax evasion, Rettig said during a Finance Committee hearing in June. (RELATED: IRS Faces Backlog Of 35 Million Unprocessed Tax Returns, Watchdog Finds)
“I have long been critical of big data collection activities, and oppose turning banks and brokers into government tax collectors,” the Republican senator from Idaho said. “My amendment prevents the undue monitoring and reporting of sensitive American taxpayer information to the IRS by financial institutions about deposits and withdrawals made by any individual or business.”
Americans for Tax Reform (ATR), the Independent Community Bankers of America, the Credit Union National Association (CUNA), the American Bankers Association and the National Association of Federal Credit Unions all endorsed Crapo’s amendment.
“CUNA remains concerned about the effect this proposed new requirement will have on credit unions,” CUNA President Jim Nussle wrote in a letter supporting Crapo’s amendment. “Privacy and data security are paramount issues.”
The massive multi-trillion-dollar legislative package would ultimately allow the IRS to “audit and harass taxpayers,” according to ATR.
Democratic Sen. Elizabeth Warren has been a vocal proponent of proposals that would give the IRS greater access to Americans’ financial information, according to ThinkAdvisor. In May, the progressive Massachusetts senator vowed to author legislation that would force banks to share their customers’ account balances and other sensitive information with the federal government upon request.
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