Republican lawmakers are ramping up their opposition to a proposed IRS rule that would require banks to provide information on accounts that showed payments of over $600.
The GOP mainly objects to the rule because it would invade account holders’ privacy, but Democrats say it is necessary to keep people from cheating on their taxes.
Senate Republican Leader Mitch McConnell (R-KY) said during a speech on Tuesday that the plan was an “absurd new IRS spying provision.”
McConnell also wrote an op-ed for the local Courier Journal on Tuesday that criticized the proposal as “a massive new dragnet that would sweep up all kinds of ordinary transactions that normal, law-abiding Americans make routinely.”
“Privacy breach waiting to happen”
The Wall Street Journal agreed, calling it a “privacy breach waiting to happen.”
Democrats who champion the plan say that it will not invade account holders’ privacy because of how transactions will be reported.
“It’s just a few pieces of information about individual bank accounts, nothing at the transaction level that would violate privacy,” Treasury Secretary Janet Yellen said of the proposal.
Democrats recently adjusted the proposal to change the cap from $600 to $10,000, and to exclude regular wage payments, but Republicans say that doesn’t change their opposition.
After all, the IRS would have to invade the account holders’ privacy to know which transactions were regular wage payments, wouldn’t they?
Yellen also justified the action by saying that banks have to report any interest over $10 to the IRS anyway. She claimed that it would be “easy” for banks to comply because they already collect the data the IRS wants.
And too many people are cheating on their taxes, she said. The IRS would use the information to target audits with greater accuracy, and it would save taxpayers and the IRS a lot of money in useless audits to do so, she claimed.
“Do you distrust the American people so much that you need to know when they bought a couch? Or a cow?” Sen. Cynthia Lumis (R-WY) asked Yellen last week when she testified in Congress.
While any kind of real privacy is increasingly an illusion in today’s society, we certainly don’t need to help that process along in any way, do we?