President Biden’s Plan To Let the IRS Spy on Your Bank Account
Government spies are taking on a whole new meaning in President Biden’s $5.5 trillion spending bill. Washington Democrats intend to pay for their behemoth spending plan by enabling the IRS to deploy a surveillance scheme on American bank accounts under the guise of closing the “tax gap.” The proposal would require banks and credit unions to report most account’s inflows and outflows to IRS agents.
This surveillance scheme creates serious privacy concerns for anyone with a job. It also imposes tax preparation costs on individuals and small businesses, in addition to operational and regulatory hurdles for community banks and credit unions. Democrats try to claim in theory it’s wealthy billionaires and corporations that they’re after, but this logic doesn’t hold up under scrutiny. Afterall, wealthy individuals and corporations can afford legal help to deal with these proposed hurdles and burdensome reporting, help of which small businesses certainly can’t afford on their own.
After rightfully receiving significant backlash, Democrats attempted to soften the edges of this proposal so the IRS would just monitor most bank accounts rather than nearly all bank accounts. The revised proposal exempts some payment processors, provides support for financial institutions to facilitate processing, and carves out certain outflows such as mortgage payments.
Attempts to paper over this gross invasion of privacy are meaningless. Regardless of what the reporting threshold is, millions of consumers and small businesses would be impacted. Even with carve outs, the most recent proposal from Democrats could still capture the bank account of a worker on minimum wage. Further, hardworking Americans like hairdressers, plumbers, contractors, gig workers, or anyone who doesn’t get paid on a W2, would have their bank accounts monitored by the IRS.
Another problematic aspect of the surveillance scheme is the risk of the IRS being hacked. The Democrats are completely turning a blind eye toward this risk, which the IRS is no stranger to. The IRS has suffered huge data breaches in the past that have led to the personal information of taxpayers being stolen. While the Treasury Department claims that they only plan to use the data to increase audits for certain high-income earners, the data collected from taxpayers making less than that is still being aggregated in a central location that is vulnerable to a cyber-attack.
The IRS surveillance plan also threatens access to financial services in rural areas. Requiring community banks and credit unions to report on account inflows and outflows to the IRS adds to the significant regulatory burden community banks and credit unions must already contend with. Requiring these financial institutions to track certain exemptions, determine whether accounts have the same owner, or if the funds moving in and out are in cash might be doable by a big bank, but the smaller community banks and credit unions in our area will find this requirement to be difficult and costly to comply with.
It’s bad enough that the $5.5 trillion spending package would lead to more inflation, explode our national debt, and kill energy jobs to create a Green Climate Corp. It’s even worse that Democrats hope to pay for it by monitoring the bank accounts of working families and small businesses, while leaving your personal information vulnerable to cyber-attacks. Don’t be fooled by Democrats’ rhetoric about making the rich pay their fair share; this Big Government socialist spending plan will hurt small businesses and make life harder and more expensive for the middle class.