21 House Democrats Ask to Cut IRS Bank Reporting From Biden’s Spending Package

By Ivan Pentchoukov
Ivan Pentchoukov
Ivan Pentchoukov
Ivan has reported for The Epoch Times on a variety of topics since 2011.
October 27, 2021 Updated: October 28, 2021

A group of 21 House Democrats on Wednesday urged House Speaker Nancy Pelosi (D-Calif.) to remove a controversial IRS bank reporting provision from the reconciliation bill.

The measure, which has already been pared back once, would require banks to hand over data to the Internal Revenue Service for all accounts with annual outflows totaling more than $10,000.

“While the intent of this proposal is to ensure all taxpayers meet their obligations—a goal we strongly share—the data that would be turned over to the IRS is overly broad and raises significant privacy concerns,” the Democrats, including Rep. Jose Luis Correa (D-Calif.) and Rep. Cynthia Axne (D-Iowa), wrote in a letter (pdf) to Pelosi and House Ways and Means Committee Chairman Richard Neal (D-Mass.)

“We have little information about how the IRS plans to protect or use this massive trove of data. Americans expect their bank or credit union to safeguard their financial information. This proposal would erode trust in financial services providers.”

The lawmakers say they’ve received hundreds of thousands of complaints about the measure from constituents and businesses over the past several weeks. While reduced from the original proposal, the $10,000 threshold would still cover a vast swath of the U.S. population.

“Most of these taxpayers are not the wealthy tax evaders who are the stated targets of this proposal,” the letter stated. “Given the privacy concerns this raises in addition to the significant burden that would be imposed on a broad range of businesses and financial institutions, we respectfully request that this proposal not be included in the Build Back Better package.”

Pelosi’s office did not respond to a request for comment.

The previous version of the provision would have compelled banks to report financial activity from accounts that had more than $600 in total annual outflows. That proposal drew sharp bipartisan criticism, prompting lawmakers to revise it to $10,000.

Senate Democrats behind the proposal say it will help the IRS identify where wealthy taxpayers who do not rely on regular “W2” wage income may be hiding business or investment income.

Sen. Elizabeth Warren (D-Mass.) said the revised proposal would exclude W2 wage income from the inflows and outflows data reporting requirement. Many Americans have their paychecks automatically deposited into their bank accounts.

Senate Finance Committee Chairman Ron Wyden (D-Oregon) said the revised proposal would potentially raise “hundreds of billions of dollars” by catching tax evaders, but declined to provide a specific estimate.

“This is about wealthy business owners at the tippy top of the top. That’s where the unpaid taxes are,” he told reporters on a conference call.

Reuters contributed to this report.

Ivan has reported for The Epoch Times on a variety of topics since 2011.