The Biden administration is looking for ways to close an estimated $160 billion tax gap — the amount of money that is owed by various taxpayers but that has not been collected. It is an admirable goal and highlights a definite problem that needs to be addressed in a responsible way.
Unfortunately, one of the administration’s main proposals is not that.
Treasury Secretary Janet Yellen has proposed to Congress that banks be required to report the total annual inflow and outflow of any account with at least $600 in it or an aggregate of $600 in transactions over the course the year. Virtually every bank account in America would fall under such a low threshold.
Mitch Waycaster, president and CEO of Renasant Bank, best summed up the obvious problems with such a proposal: "The administration's proposal to require financial institutions to track and submit the vast majority of their banking customer information to the IRS risks major data breaches, infringes on financial privacy and overburdens the banking system with massive data collection responsibilities …”