North Carolina State Treasurer Dale Folwell is among a group of state treasurers and auditors 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 currently being considered in Congress. The financial officers from various states sent a letter to President Joe Biden and U.S. Secretary of Treasury Janet Yellen, rebuking the provision. They wrote it would violate privacy, create data insecurity and put a strain on financial institutions.
“We do not believe the federal government should give the IRS the unprecedented and unconstitutional power to peer into law-abiding citizens’ private financial accounts,” the group wrote. “This would be one of the largest infringements of data privacy in our nation’s history and is a direct assault on the financial disclosures of all Americans.”
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. Treasury officials said the proposal would help the IRS track under-reported income, but the group of state leaders argued there is “zero quantitative or qualitative evidence” that it will help the IRS catch tax invaders.
Folwell said Tuesday the plan would increase the administrative burden for small banking institutions, especially those in rural North Carolina “who are already struggling to keep up with ransomware and hacking of their computers, and just generally, fighting against big banking behemoths across the country.”
The group of treasurers and auditors also argues the IRS is a constant target of cybercriminals and has faced significant data breaches. The officials said it would also exacerbate mistrust for banks among Americans and increase the number of people who refuse to put their money in banks.
“If passed, this will be one of the largest and most continuous data mining exercises against Americans in our history and will put a constant strain on customer privacy, data security and overall safety of the banking system,” the group wrote.
