A group of 21 Democratic representatives wrote to House leadership today calling for the removal of the Biden administration’s controversial proposal for financial institutions to report information on gross inflows and outflows on all accounts above a certain de minimis threshold. “We respectfully request that this proposal be withdrawn from further consideration in favor of a more targeted approach,” the lawmakers wrote to House Speaker Nancy Pelosi (D-Calif.) and House Ways and Means Committee Chairman Richard Neal (D-Mass.).
The Democrats said that they share the proposal’s goal of reducing the so-called tax gap but that “the data that would be turned over to the IRS is overly broad and raises significant privacy concerns. 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.”
Even after the administration and senior legislators floated an increase in the de minimis threshold, “a significant number of taxpayers will continue to meet the reporting criteria. Most of these taxpayers are not the wealthy tax evaders who are the stated targets of this proposal.” The lawmakers added that they have heard from “hundreds of thousands of constituents” opposed to the proposal.
Combined with united GOP opposition, the lawmakers’ letter indicates a majority of the House opposes the IRS provision. It comes one day after Sen. Joe Manchin (D-W.Va.) indicated his opposition in the evenly divided Senate. However, amid the fluid negotiations on Capitol Hill, ABA continues urging bankers and their customers to keep up calls and emails to oppose the proposal.
