Backlash continues against $600 bank monitoring proposal

(The Center Square) – Georgia Attorney General Chris Carr is among a group of 20 state attorneys general opposing a federal proposal that would allow the IRS to monitor bank accounts with more than $600.

The plan is part of Democrats’ $3.5 trillion spending bill being considered in Congress. The attorneys general sent a letter to President Joe Biden and U.S. Secretary of Treasury Janet Yellen, asking the administration to rescind the proposal. They wrote the plan would be “overly burdensome” and “illegal.”

“In yet another disturbing example of federal overreach, this plan raises significant privacy concerns, allowing the federal government access to private financial account information with complete disregard to our constitutional protections against illegal searches,” Carr said. “In addition, this proposed plan, if allowed to be implemented, would be incredibly burdensome on America’s financial institutions. This proposal violates the rule of law and is reckless, and the Administration must disavow this blatant abuse of power and withdraw their misguided policy.”

The measure requires banks to create a system to track and report the balances for accounts with $600 flowing in or out of them to the IRS. The banks would not report details on individual transactions, such as how the money was spent. U.S.Treasury officials said the proposal would help the IRS track under-reported income, but the group of attorneys general rebuked the approach.

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“We understand that you also believe Americans are gaming the system and, without citing evidence to support this belief, your response is to institute a burdensome, ‘Big Brother-mandate’ requiring financial institutions to report ‘a few pieces of information about individuals’ bank accounts’ to the IRS,” they wrote.

The attorneys general said the proposal also would invade privacy and violate constitutional protections against illegal searches and seizures. They also argued it would increase the financial and administrative burden for banks and other financial institutions that would be passed on to consumers.

The other opposing attorneys general are from Alabama, Alaska, Arkansas, Florida, Idaho, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Ohio, Oklahoma, South Carolina, Texas, Utah and West Virginia.

Gov. Brian Kemp and Georgia business and banking leaders also have voiced their opposition to the proposal. They also argued it violates privacy and increases banks’ and credit unions’ regulatory burden and cost. They added it would make banking information more susceptible to data breaches and fraud.