“I ask that you avoid adding divisive IRS account reporting requirements to the package”
But even congressman Charlie Crist (D-Fla.) is warning them to stop.
In a new letter to Senate Finance Committee chairman Ron Wyden (D-Ore.) and ranking member Mike Crapo (R-Idaho), Crist wrote:
The American public, tax policy experts, financial institutions, and state legislatures have lined up to oppose including this new policy in the House version of the bill. All share a concern that this policy is too broad and will likely disadvantage small businesses, community banks and working families – those most vulnerable as the economy strives to rebound from the COVID-19 pandemic.
The American people have shown firm, principled opposition to the snooping provision, as seen in this video compilationof on-the-street interviews.
Democrats openly refer to the bank snooping plan as a “comprehensive financial account reporting regime.” Media reports indicate the Biden Treasury Dept. was “perplexed” that this is not a popular idea.
The Biden administration proposed to give the IRS new power to automatically access and store bank account, Venmo, Paypal, and CashApp account inflows and outflows for all business and personal accounts.
Even the Tax Policy Center says the plan is “poorly conceived,” and will “bury the agency in a sea of unproductive information” and “won’t help” and “will fail.”
On Oct. 19 Tax Policy Center senior fellow Steve Rosenthal wrote on Twitter:
“Biden’s Treasury doubles-down on a poorly-conceived reporting proposal, casting its net far too wide, which may catch small businesses, but not the big fish (who cheat by stretching the tax law, not by hiding their cash flow). I tried to help at the start, but I gave up.”
On Oct. 20 Rosenthal wrote on Twitter:
“If Congress wants to collect more money from the rich, it must pass better tax rules, which measure and time income accurately and do not create ambiguities that aggressive taxpayers and their highly-paid advisers can exploit. Bank reports on aggregate cash flows won’t help.”
On Oct. 16 Rosenthal was quoted in The Hill:
Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, whose former director now works in the Biden administration, said the proposal is too expansive and thinks bank lobbyists “have touched a raw nerve” with their customers who are concerned about privacy.
“I think at the end of the day, this bank proposal will fail,” he said.
On May 3, Rosenthal wrote:
“In practice, the IRS’ task would be daunting and, in fact, bury the agency in a sea of unproductive information.
Biden’s plan is expansive: deposits and withdrawals must be reported for every account, individual or business, at every financial institution. Then, to construct taxpayer-specific information, the IRS must collate taxpayer-account information across many different financial institutions. That is because taxpayers often hold multiple accounts. Yet, whether collated or not, deposits and withdrawals are not income, unlike wages or interest. And deposits and withdrawals cannot be netted to calculate income, without substantial adjustments.”
On Oct. 18 Rosenthal was quoted in The Washington Post:
“It’s still a deeply flawed proposal,” Rosenthal said. “Even at $10,000, the Biden bank proposal is still too sweeping, throws a net very wide, and it’s hard to see what fish they want to catch here.”
In the bill, IRS “enforcement” funding is 23 times greater than the amount allocated to “taxpayer services.”
The bill will impose 1.2 million additional annual IRS audits; about half will hit households making less than $75k.