A view of the IRS building in Washington is shown March 22, 2013.
A provision in the Democratic spending budget bill that would allow the Internal Revenue Service (IRS) access to U.S. transfer transactions over $600 has sparked strong concern among Republicans and the U.S. banking industry, but House Speaker Nancy Pelosi said Tuesday (12) that Democrats support the bill and that the access threshold for the bill is still under discussion.
According to the Epoch Times website, among the $3.5 trillion Build Back Better Act submitted by Democrats is an $80 billion investment bill for the IRS that would allow the agency to access small bank transfer transactions of $600 or more.
Democrats have been saying that the Democrats introduced this provision to ensure that wealthy Americans would not avoid their duty to pay taxes and that the government would pay the expense so the bill would not increase the nation’s debt. But Republican lawmakers and the U.S. banking system have expressed disappointment with the claim, both saying that their constituents and their customers are very concerned about the provision and want the government to drop it.
Pelosi said in a news conference Tuesday that the provision would remain in the spending budget bill.
She first politely replied, “Yes, the provision will be in the bill.”
She then called the suggestion that people are concerned about the provision anecdotal and said that people may not be very concerned about the bill, saying, “With all due respect, anecdotal evidence is not accurate data.”
She then also acknowledged that some people are concerned about the bill, to which she said, “But if people are breaking the law and not paying their taxes, taking this measure is a way to track them.”
As some Democratic lawmakers also suggested raising the threshold of transactions that the IRS would be allowed to review to $10,000 and exempting regular income from review. Therefore Pelosi said the exact amount for the provision is still under negotiation.
Treasury Department: This provision is expected to raise $460 billion in revenue for the country over the next decade
And U.S. Treasury Secretary Janet Yellen (D-Mass.) had defended the provision at a House regulatory hearing on Sept. 30.
She said, “We have recommended that the resources of the IRS be increased so that it can recruit qualified auditors. We have also recommended that additional sources of information be added so that the IRS can gain insight into the sources of opaque income. We believe these two recommendations could go a long way toward addressing the estimated $7 trillion tax gap that we have in the country.”
Yellen also said she does not believe that allowing the IRS access to $600 transfer transactions is an invasion of Americans’ privacy. She said, “To ensure taxpayer compliance with the tax code, the IRS should have access to a great deal of the information they need to have access to.”
The Treasury Department estimates that this policy, if implemented, would raise $460 billion in revenue for the country over the next 10 years and partially offset the spending on the massive Democratic spending bill.
Republicans: The rule would put Americans under surveillance like in Communist China
Sen. Rick Scott (R-S.C.) questioned the Biden administration’s proposal on the Senate floor Oct. 7, arguing that it would allow the IRS to monitor the bank accounts, pensions and investment accounts of all Americans.
There’s only one explanation for this, and it’s a frightening one, and that’s that the left wants to know and control how Americans spend their money,” he said. ⋯⋯… I want to make it clear that this proposal is very similar to the policies of Communist China… in Cuba and Communist China, where the government is involved in every aspect of an individual’s life, and now the left-wing government wants to do the same thing. ⋯⋯…This kind of initiative is un-American.”
For his part, Sen. Tommy Tuberville (R-Alaska) urged the Senate to quickly pass his proposed Protecting Financial Privacy Act, which would prevent the IRS from accessing their customers’ financial transaction data under the existing U.S. Bank Secrecy Act.
In a statement released Oct. 7, Tuberville noted that the left-wing administration’s proposal to allow the IRS access to people’s transfer transactions would not close the government-land tax gap, but would only: “violate the autonomy of every freedom-loving American who values his or her financial privacy.”
Coalition of Banks and Private Businesses Urges Elimination of the Provision
The Coalition of American Banks and Private Companies also sent a letter to Speaker Pelosi and House Minority Leader Kevin McCarthy (R-Calif.) on Sept. 17, urging them to eliminate the provision. The letter reads, “While the administration claims that the stated goal of this massive data collection is to detect tax evasion by wealthy individuals, this proposal does not address that goal at all… The plan calls for the collection of financial information on virtually all Americans without properly explaining how the IRS will store, use, or protect this vast repository of personal financial information, which will create enormous risks for the affected The risk to affected parties is enormous.”
The letter also points out that privacy concerns are one of the top reasons many Americans choose not to open financial accounts or participate in the financial system.
House Minority Leader McCarthy also said he opposes the provision because, “It’s an un-American provision.”
He said, “While the left is making big claims that they’re taxing the rich, they’ve created a new IRS surveillance program that targets low- and middle-income people.”
He cited the impact of this bill on people who receive tips in the United States as well, because tips are often in cash and the IRS would not have been able to track this income, but in this provision the IRS will be able to track this income by tracking transaction data.
He also criticized the left-wing administration’s bill, which would allow the IRS to snoop into Americans’ bank accounts and monitor every transaction Americans make “without a warrant, without a license, and without a cap. He promised that Republicans would do everything in their power to prevent the passage of this provision.
Senate Republican Leader Sen. Mitch McConnell (R-Ky.) also said he opposes the provision that would censor every American’s account in order to raise money for the left’s big spending policies.