21 House Democrats Revolt Against Party’s IRS Bank Account Snooping Proposal

Twenty-one House Democrats have expressed opposition against a proposed bank reporting proposal included in the $2 trillion budget reconciliation bill that will require the annual submission of gross annual inflows and outflows of the U.S. financial accounts to the Internal Revenue Service (IRS).

In a letter to House Speaker Nancy Pelosi, D-Calif., and House Ways and Means Committee Chairman Rep. Richard Neal, D-Mass., the group questioned how exactly the IRS planned to ensure the privacy of financial data. “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 representatives wrote.

The group argued that with “little information” provided about how the IRS will protect the financial data of many Americans, the “proposal would erode trust in financial services providers.” They added that the measure, if included in the package, will largely affect people outside the “wealthy tax evaders” group that the measure is focused on. The U.S. Treasury Department initially proposed for the reporting of all accounts with at least $600, but the bottom limit was raised to $10,000, Roll Call reported. The threshold was raised after protests from banking and business interests.

There has been increasing opposition over the proposed rule that will apply for checking accounts, loans, investments, and savings accounts. Credit Union National Association President and CEO Jim Nussle expressed gratitude “to the officials who heard the concerns of credit union members and consumers about the negative impact this proposal would have on their financial lives.”

The National Republican Congressional Committee (NRCC) also communicated its opposition to the proposed rule through an ad campaign that accused Democrats of “hiring an army of IRS agents to spy on your bank account.”

The ad urged people to “tell Stephanie Murphy to stop spying on your bank account.” The committee said its internal polling found 57% of voters said they were less likely to support a Democrat who supported the proposal, The Hill reported.

Non-profit organization the American Action Network (AAN) also released an ad campaign Wednesday that targeted the IRS proposed rule. “To help pay for trillions in new spending, Nancy Pelosi wants government to spy on nearly every American bank account, looking for money to spend” a female narrator can be heard saying as the ad plays.

The ad also criticized Rep. Tom Malinowski, D-N.J., for allegations that he failed to disclose financial data regarding his personal stock trades.

The banking industry and Republicans have also called for the proposal’s removal as it is unfair to intrude on the finances of people, Politico reported. Paul Merski, the executive vice president for congressional relations of the Independent Community Bankers of America, said “a lot of the community bankers in West Virginia have been pressing Manchin on this.”

Sen. Joe Manchin, D-W.Va., has said that he thinks the divisive proposal will “be gone” from the reconciliation bill.