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Top Missouri Republican officials have joined banking groups in opposing a Biden administration proposal that the IRS collect information on bank accounts that exceed $600 in transactions.
Under this plan, financial institutions would report the total deposited and withdrawn from personal and business accounts annually. Accounts with less than $600 in transactions per year or that contain a balance of less than $600 would be exempt.
The Treasury estimates that $600 billion a year is lost to tax evasion, according to the Associated Press. It has promoted the proposal as a way for the IRS to identify account-holders who receive large incomes not reported on the W-2 forms filed by most Americans. Banks already report interest income that exceeds $10.
The proposal has drawn protests from financial institutions and Republicans, including two top officials in Missouri, over concerns for the privacy of account-holders.
State treasurer Scott Fitzpatrick said earlier this month that if the rule passes, he would not cooperate with its enforcement in his handling of about 200,000 state savings accounts for students and people with disabilities.
“Turning over their transaction data to the federal government is illegal under Missouri law and a gross violation of Missourians’ expectation of privacy when it comes to their personal financial records,” Fitzpatrick, who is running for state auditor, said in a statement. “I will not turn this information over to the IRS voluntarily and will fight in court to block any attempt by the federal government to compel my office to comply with this mandate.”
Attorney General Eric Schmitt, who is running for U.S. Senate and has sued or joined numerous suits against the Biden administration, joined other Republican AGs in signing a letter Friday to Treasury Secretary Janet Yellen opposing the plan. Kansas Attorney General Derek Schmidt also signed.
The letter called the proposal a “Big Brother-mandate” that would force banks to provide private information on routine payments for rent, groceries “and other transactions that are part of everyday life of Americans who have done nothing wrong.”
The proposal would not require the reporting of individual transactions, only the aggregate amount of deposits and withdrawals.
At her daily briefing Monday, White House press secretary Jen Psaki said the measure is intended to compel the extremely wealthy to pay their fair share.
“I would note that the top 1 % is responsible for $163 billion a year in owed by unpaid taxes, so this proposal that we’re talking about is about preventing high income individuals who are not typical wage-earners,” she said.
Yellen has dismissed the Republican criticism, telling CNBC this month the data sought is “just a few pieces of information about individuals’ bank accounts, nothing at the transaction level that would violate privacy.”
Democratic lawmakers have suggested raising the $600 threshold, chosen to catch income split up between multiple accounts, to $10,000.
McClatchy’s Bryan Lowry contributed to this story.