Janet Yellen, the Treasury Secretary, has officially expressed her support for the plan from the Internal Revenue Service to try and track the gross incoming and outgoing money of American bank accounts.
As stated in a proposal that has many lawmakers upset and calling it a violation of the Fourth Amendment, the Democrats’ currently pending $3.5 trillion social spending bill would force banks to have to report the gross inflows and outflows directly to the IRS for any transaction that breaks the $600 threshold.
Yellen praised the plan as she took part in a recent interview on “Squawk Box” with CNBC.
“Right now, on every bank account that earns more than $10 a year in interest, the banks report the interest or into the IRS,” she stated. “That’s part of the information base that includes W2s and reports on dividends and other income that taxpayers have earned so collection of information is routine.”
She went on to note that there has been projected a $7 trillion tax gap to take place over the next decade, which is a reality that stops the IRS from collecting “what we believe are owed.”
“It comes from places where the information on income is opaque and can be hidden,” she stated. “And a simple way for the IRS to get a sense of where that might be is just a few pieces of information about individuals’ bank accounts, nothing at the transaction level that would violate privacy, simply aggregate inflows into the account over the year and aggregate outflows. That would really help the IRS target their auditing resources.”
“So, it is not reporting of individual transactions or anything of the like, and it would be a simple thing for banks and other payment providers to provide along with the other information they’re already providing.”
Many Republican governors and state treasurers have stated that they plan to resist the Democrat plan at all costs.
“I will stand up to this government overreach and protect the privacy of those account holders,” stated Scott Fitzpatrick, the Missouri state treasurer. “Turning over their transaction data to the federal government is illegal under Missouri law and a gross violation of Missourians’ expectation of privacy when it comes to their personal financial records. I will not turn this information over to the IRS voluntarily and will fight in court to block any attempt by the federal government to compel my office to comply with this mandate.”
“It would be absolutely absurd for me to turn over their private account data regarding money they’re saving for their loved ones’ future to the IRS, and I do not intend to do so,” continued Dennis Milligan, the Arkansas state treasurer. “I would do all I could in my role to not comply with this proposal.”