TOPEKA – (October 15, 2021) - Requiring banks or other financial institutions to give the IRS access to nearly every financial transaction is an illegal overreach by the federal government that will have devastating effects on the banking system and unintended consequences for Americans, Kansas Attorney General Derek Schmidt said.
In a letter sent today to President Joe Biden and Treasury Secretary Janet Yellen, Schmidt as part of a coalition of 20 attorneys general voiced opposition to the proposal under consideration by the Biden administration. The proposal is designed as a source for additional revenue to cover massive federal spending increases.
“Your proposal seeks to leverage private transaction information by effectively transforming banks into large-scale data processors for the IRS, forcing the banks to provide private information regarding common transactions such as rent payments, paying for groceries, and other transactions that are part of everyday life of Americans who have done nothing wrong, are not under suspicion of having done anything illegal and for which the government has no evidence or reason to believe are guilty of civil or criminal violations,” Schmidt and the other attorneys general wrote.
The attorneys general argue that banks across the country will have to transform the way they conduct business in order to comply with the proposed reporting requirements, including investing significant amounts of money in data collection and other systems. Consumers will be punished in many ways, as banks would likely pass on costs in the form of fees or higher interest rates, not to mention the centralized storage of sensitive information would provide cyber criminals with an additional target to exploit with information about nearly every American.
The attorneys general write that if stopping financial criminals or punishing those who evade taxes is the goal of the administration, they will gladly help find solutions based on the rule of law, but government snooping on virtually every American with a bank account is not the answer.
A copy of the letter is available at https://bit.ly/3DK7zSD.