DES MOINES, Iowa – U.S. Senator Joni Ernst, R-Iowa, on Tuesday blasted a proposal by the Biden Administration allowing the Internal Revenue Service (IRS) to access data on Iowans’ bank accounts. She noted that Democrats should instead tackle the rampant inflation and rising energy costs that are hitting everyday Americans’ pocketbooks.
The original proposal published in a U.S. Treasury Department document in May would require banks annually to turn over to the IRS data for all business and personal accounts from financial institutions, including bank, loan, and investment accounts holding more than $600. Banks, under the proposal, would report on “gross inflows and outflows” with a “breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner.”
The document also said that banks would report “not only gross receipts but also gross purchases, physical cash, as well as payments to and from foreign accounts, and transfer inflows and outflows.”
“Requiring comprehensive information reporting on the inflows and outflows of financial accounts will increase the visibility of gross receipts and deductible expenses to the IRS. Increased visibility of business income will enhance the effectiveness of IRS enforcement measures and encourage voluntary compliance,” the document said, explaining the rationale for the proposal.
She said she explained to a friend who texted her concerned about the proposal that IRS would have access to everyday Americans’ bank accounts.
“They will be tracking your expenditures and your revenues. And it’s not just the wealthy elite folks. It is every American, virtually every American out there, that has direct deposit, anyone that might be paying their child for an airline ticket home over Christmas break, whatever it might happen to be. Any expenditure, the IRS is going to have the right to go into your bank account and surveil it,” she said during a press conference.
The IRS, under the proposal, would not directly access bank accounts but would require banks to disclose transactions.
With stiff opposition, Senate Democrats on Wednesday proposed narrowing the threshold from $600 to $10,000.
“Today’s new proposal reflects the administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters,” Treasury Secretary Janet Yellen said in a statement supporting the Senate Democrats’ change.
Banks and credit unions still oppose the proposal, citing their customers’ concerns.
“It has become abundantly clear that Americans oppose the IRS obtaining additional information on their financial accounts,” National Association of Federal Credit Unions President and CEO Dan Berger said in a statement. “The updated plan is nothing more than window dressing in an attempt to shore up support for a flawed proposal.”
“If there are opaque sources of revenue, let’s focus on addressing that challenge head-on rather than over-collecting information from everyone in the hope that it shines a light on a small number of tax cheats,” American Bankers Association Vice President for Tax Policy John Kinsella, recently wrote.
Ernst said Democrats should focus on issues that concern Americans instead of trying to pass this proposal.
“Honest, hardworking Americans, is this what we want to allow our federal government to do? And these honest, hardworking Americans, with the rampant inflation that is out there, they are struggling to make ends meet. The cost of gasoline is now over, on average, $3 a gallon, which is over $1 more than it was a year ago. I visited a Community Action Group while I was at home in Iowa, in Ottumwa, Iowa, they were doing a diaper bank drive, and the volunteers were packaging up diapers, costs are skyrocketing, the supply chain is broken. And yet, the Biden administration wants to go in and spy in your bank accounts. They want to raise taxes on hardworking Americans. Where the heck is this country going under this administration?” she asked.