The IRS will track all bank transactions over $600 under Biden's plan

The IRS will track all bank transactions over $600 under Biden's plan; business revolution

Biden administration has made its plan to strengthen IRS scrutiny by expanding its funding and authority. Biden's latest proposal requires banks to turn over bank account information to the Internal Revenue Service for all accounts with more than $600.

In a sharp response against the proposal, more than 40 trade associations, some representing entire industries or economic sectors, signed a letter to US House Speaker Nancy Pelosi, a Democrat from California, and minority leader Kevin McCarthy, of California, sounding the alarm about the plan.

The letter, which includes support from several banking alliances, calls on Congress to reject the requirement, saying it would violate customer privacy and create a very costly reporting requirement for banks.

"While the stated goal of this broad set of data is to expose tax evasion by the wealthy, "In addition to significant privacy concerns, it would create enormous liability for all affected parties by requiring that the financial information of nearly every American be collected without a proper explanation of how the IRS stores, protects and uses this vast array of personal financial information. We believe this program is costly to all parties, is not fit for purpose, and is loaded with the potential for serious unintended negative consequences."

The groups argue that they will target "nearly every American" and question whether the IRS can keep this information safe from hackers and bad guys.

"The undersigned associations write to express our strong opposition to the proposal under consideration as part of a settlement package that would create a new expanded tax information reporting system that would directly impact nearly every American and small," the letter said: "Dealing with an account in a financial institution." This proposal would create significant operational and reputation challenges for financial institutions, increase tax preparation costs for individuals and small businesses, and create severe financial privacy concerns. 

Some reports suggest Democrats are hoping to raise the $600 threshold, but that has yet to materialize.

Biden proposed providing an additional $80 billion to the IRS earlier this year for scrutiny, saying the agency would take more than that money. Representatives of the House of Representatives have so far indicated that they plan to meet that request.

 A fact sheet says the White House handled it over to lawmakers for sale in the plan. But the wealthy who get their income from undisclosed sources can hide their income and avoid paying the taxes they owe. 

Republicans on the House set a hypothetical roundtable titled "Arming the IRS: A Bad History and the Need to Protect Taxpayers" to discuss these concerns.

"The meeting will highlight congressional Democrats' efforts to nearly double the size of the IRS with a massive increase in funding while doing nothing to address the IRS' weaponry, including the massive criminal leak of taxpayer information to ProPublica in June of this year," the office said. Texas Republican Representative Kevin Brady.

That wasn't the only criticism from the business community slapped on a $3.5 trillion bill in recent days.

The US Chamber of Commerce formally condemned the bill this week, calling it an "existential threat" to the economy.

"This reconciliation bill is 100 bills in one that represents every big government idea that wouldn't have passed in Congress," said Susan Clark, president, and CEO of the American Chamber of Commerce. "The bill represents an existential threat to America's fragile economic recovery and future prosperity. We will not find durable or workable solutions in a single massive statement that is more than twice the budgets of all 50 states.