WASHINGTON D.C. (WTVO) – The Biden administration’s proposal that would require banks to report data to the IRS for transactions over $600 is being defended.
The collection of such data, which has been looked at as a massive invasion of privacy, was called “routine” by Treasury Secretary Janet Yellen, according to the New York Post. Many Republicans have reportedly called the IRS’s collection of more information about bank accounts and taxpayers invasive. However, according to Yelen, the IRS has the “wherewithal” to get the job done.
“Well, of course they do,” Yellen said during an interview with CNBC’s “Squawk Box” on Tuesday. “Right now, on every bank account that earns more than $10 a year in interest, the banks report the interest earned to the IRS. That’s part of the information base that includes W2’s and reports on dividends in other income that taxpayers earned. So collection of information is routine.”
Yelen said that the reason behind the information, and proposed tax hikes, is the “enormous tax gap” in the U.S. She said that the information that will be collected will be just “a few pieces of information about individual bank accounts” and that “nothing at the transaction level…would violate privacy.”
The collecting of the information would help the Treasury Department determine which high-income individuals might be concealing income and transactions.
Republicans have been labeling the proposal as an invasion of privacy. Sen. Cynthia Lummis of Wyoming was one to speak out at a recent Senate Banking, Housing and Urban Development Committee hearing.
“Do you distrust the American people so much that you need to know when they bought a couch? Or a cow?” Lummis asked Yellen. “There are obvious privacy concerns for all Americans here, and this represents a dramatic new regulatory burden for community banks and credit unions in Wyoming and elsewhere.”
Yellen defended the plan, saying that the proposal did will not force banks to provide transaction-level data to the IRS, and that “it is important to have comprehensive information, so that individuals can not game the system and have multiple accounts.”