A snoop too far for IRS
The Biden administration wants to send the Internal Revenue Service on a fishing expedition. Actually, a whole lot of them.
Under a proposal intended to raise money for new programs, the administration would require banks to report annual cash inflows and outflows from the accounts of ordinary Americans. The idea is to help the IRS find tax cheats who aren’t fully detailing their incomes.
As originally proposed, the plan targeted accounts with at least $600 worth of transactions a year — in other words, nearly all of them. In the face of an intense backlash, the Biden administration and Senate Democrats are now hoping to narrow the plan’s scope by setting the disclosure level at $10,000 in annual transactions.
The number hardly matters. Either way, the plan is a potentially dangerous invasion of privacy.
Nor do we doubt that the proposal would help the IRS find tax cheats and crack down on the widespread underreporting of income. Neither do we doubt that fewer Americans will cheat in the first place if they know the IRS is watching.
It is likewise true that allowing police to proactively search every home, car and pocket would uncover other forms of illegal behavior, and that installing government cameras in every living room would keep more Americans on the straight and narrow.
That doesn’t mean either is a good idea. After all, there’s a reason the Fourth Amendment protects against searches and seizures undertaken without probable cause. Americans have an inherent right to privacy and the presumption of innocence, as they should in a free society.
The Biden proposal casts those guarantees aside with what amounts to financial stop-and-frisk, casting an overly wide net and putting the entire population under suspicion.
Critics, including some state treasurers, say the plan would enable one of the largest infringements of data privacy in the nation’s history.
That should be unsettling for every American who values personal privacy, and upsetting for Joe Biden voters who saw the Democrat as an antidote to Donald Trump’s authoritarianism.
To quell opposition, the Biden administration is promising to use the newfound surveillance powers to crack down only on wealthy tax evaders and says the IRS won’t go after lower-wage workers who may not fully report tips and income.
But the most sophisticated tax avoiders will find ways around the monitoring, including by shifting money into cryptocurrencies. And even if we were to trust the promises, there’s no guarantee future administrations won’t use the foothold for nefarious ends, potentially allowing the government to see how every American household spends its money in minute detail.
Americans shouldn’t accept another erosion of personal privacy on a promise of good intentions. Someday, we may find the road to a surveillance state was paved with them.