Two Republican members of the House of Representatives Ways and Means Committee questioned whether the IRS intends to use its $80 billion in additional funding from the Inflation Reduction Act (PL 117-169) to surveil American bank accounts.
In an October 27 letter to Treasury Secretary Janet Yellen, Republican Representatives Kevin Brady of Texas and Drew Ferguson of Georgia inquired if the Treasury Department will renew any version of its prior “Comprehensive Financial Account Reporting” proposal.
“We write to seek information on the U.S. Department of the Treasury’s intentions regarding the relationship between $80 billion in new mandatory funding for the Internal Revenue Service (IRS) and the Department’s prior policy proposal to surveil American private bank transactions,” stated the lawmakers. “We remain strongly opposed to any effort to impose a bank surveillance scheme on Americans and believe it is important for the American people to know where this Administration stands on this issue.”
The Biden Administration first proposed a bank surveillance plan in 2021, but congressional Democrats were forced to drop the proposal due to public opposition. However, the tax writers stated that “we remain concerned that the Administration intends to renew its prior efforts to impose this reporting scheme.”
The proposal reported widely in the media at the time was originally included in the President’s FY2022 budget request and was described as being part of a “comprehensive” financial account information reporting regime where financial institutions would report data on financial accounts in an information return. The annual return would report 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 requirement would apply to all business and personal accounts from financial institutions, including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600.
The Administration later modified its proposal by increasing the $600 gross flow threshold to $10,000. Additionally, wage and salary earnings, as well as government benefits (e.g., unemployment compensation) deposited into accounts, would not count toward the $10,000 threshold.
“Given this Administration’s repeated, brazen efforts to make law through improper executive action, we remind you that the Administration does not have legal authority to implement a bank surveillance scheme by executive action,” stated the lawmakers in their letter. “This policy could only be executed following an Act of Congress, which the Department recognized by placing its proposal in the Green Book in the first place.”
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