Ohio AG joins GOP outrage over IRS proposal
WASHINGTON, D. C. — Ohio attorney General Dave Yost on Friday joined 19 other Republican state attorneys general in objecting to a federal policy proposal that would require financial institutions to give the Internal Revenue Service information on any bank account with a balance of more than $600 whose yearly transactions exceed $600.
The group wrote a letter to President Joe Biden and Treasury Secretary Janet Yellen that argued that the Treasury Department proposal aimed at reducing tax evasion and improving tax collection “stands in direct opposition to privacy that Americans are entitled to and deserve.”
If implemented, the Treasury Department estimates the proposal would generate $460 billion in tax revenue over 10 years. The money would be used to offset some of the spending in the multi-trillion dollar reconciliation bill that Democrats are drafting to spend money on programs that they say would improve health care, education, infrastructure and counter climate change, among other things.
House Speaker Nancy Pelosi on Tuesday said the $600 reporting threshold is still being negotiated as the bill is being drafted.
“If people are breaking the law and not paying their taxes, one way to track them is through the banking measure,” said Pelosi.
The letter from the state attorneys general argues it would be “unacceptable, illegal and contrary to the wellfounded constitutional principles against illegal searches and seizures” to have the federal government “combing through almost every American’s bank account without cause, or even suspicion.”
“Your proposal seeks to leverage private transaction information by effectively transforming banks into large-scale data processors for the IRS, forcing the banks to provide private information regarding common transactions such as rent payments, paying for groceries, and other transactions that are part of everyday life of Americans who have done nothing wrong, are not under suspicion of having done anything illegal and for which the government has no evidence or reason to believe are guilty of civil or criminal violations,” the letter says.
A group of Republican U.S. Congress members and Ohio Treasurer Robert Sprague made separate objections to the proposal last month, with Sprague calling it “an outrageous assault on Americans’ liberties.”
A statement from Yost said it “must not become law.”
“This makes the IRS more powerful than the police — even the cops have to at least issue a subpoena,” Yost’s statement said. “Even the police have to have a reasonable, articulable suspicion before they can ‘stopand-frisk.’ This anti-american bill allows real-time spying by the government on law-abiding citizens — all of us, all the time.”
The Treasury Department says the extra data is being sought to target high earners who underreport their tax liabilities.
“It is not about using new financial account information reports to increase enforcement scrutiny on lower-income taxpayers,” said a statement from Natasha Sarin, deputy assistant secretary for economic policy at the Treasury Department. “The Administration has been clear that audit rates will not rise relative to recent years for those with under $400,000 in actual income. Instead, these proposals are about targeting enforcement actions where they belong: on higher earners who do not fully report their tax liabilities.”
U.S. Sen, Sherrod Brown, an Ohio Democrat who chairs the Senate Committee on Banking, Housing and Urban Affairs, supports increasing IRS reporting requirements, his office said. Brown believes it will better equip the IRS to distinguish between honest taxpayers and wealthy tax cheats it needs to audit.