Arizona State Treasurer Kimberly Yee sent a letter to Arizona’s Democratic Sens. Kyrsten Sinema and Mark Kelly urging them not to vote for legislation that would allow the IRS to monitor Americans’ bank accounts for transactions of $600 or more in withdrawals and deposits.
The proposal is part of the Biden administration’s $3.5 trillion American Families Plan, the so-called “human infrastructure” bill. Scott Earl, the CEO & president of Mountain West Credit Union Association, also signed the letter, representing multiple credit unions.
Yee, who is running for governor of Arizona, said, “As it stands now, this proposal would threaten the financial security of more than 100 million Americans from all demographics. If it passes, the government will conduct one of the largest data mining exercises in American history, risking the security of the banking system.”
She warned, “This proposed fishing expedition fundamentally changes the nature of the information that financial institutions are required to report and forces financial institutions to provide the government with information that is not related to taxable activity.” Yee observes that “the federal government’s history of keeping financial data secure is dubious at best” and labels the proposal “an unprecedented overreach that the country has never seen before.”
The purpose of the legislation is to catch more people cheating on their taxes since Democrats are looking for ways to bring in money to afford their $3.5 trillion bill. Treasury Secretary Janet Yellen sent a letter to the House Ways and Means Committee enthusiastically supporting the measure.
The IRS has a history of targeting conservatives, which was exposed under the Obama administration. A 2013 inspector general’s report found the IRS selected conservative and Tea Party organizations for investigation, often merely based on their conservative-sounding or Tea Party names.
The IRS has also come under fire for careless security with confidential information. The tax returns of some of the country’s wealthiest people were leaked to the investigative nonprofit Pro Publica this past year, which published the information in June.
Many groups representing banks and other industries that would be affected urged Congress not to implement the legislation, citing privacy and security concerns as well as the onerous additional work. They candidly observed, “While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population.”
Former IRS Commissioner Charles O. Rossotti acknowledged that “the IRS today cannot use all the information it already receives, and significant areas of noncompliance are barely addressed, so more reporting alone will not solve the problem.”
The Independent Community Bankers of America conducted a poll of voters and found that 67 percent oppose the proposal, with 64 percent saying they do not trust the IRS.
Under fire, Democrats are considering raising the threshold to $10,000 instead, which is similar to the amount the federal government already monitors through the Treasury Department. If approved by Congress, the measure would go into effect in 2023.
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Rachel Alexander is a reporter at The Arizona Sun Times and The Star News Network. Follow Rachel on Twitter. Email tips to email@example.com.
Photo “Kyrsten Sinema” by Gage Skidmore. CC BY-SA 2.0.