ATLANTA — Georgia business leaders are pushing back on a crucial part of the White House’s proposed tax compliance agenda.
President Joe Biden’s Americans Family Plan includes a tax compliance agenda, which would require banks and other financial service providers to report all banking transactions – personal or business – for every account that has at least a $600 balance or does $50 in transactions per month.
U.S. Treasury Secretary Janet Yellen and Charles Rettig, commissioner of the Internal Revenue Service (IRS), are urging Congress to give the IRS more access to taxpayers’ bank accounts, which they say will allow the agency to target its audits more effectively.
“This wrongheaded proposal violates the privacy of almost every American in the name of catching wealthy tax cheats,” said Joe Brannen, president & CEO of the Georgia Bankers Association. “Consumers, small business owners and families should rightly be concerned that their personal financial information will be turned over to the IRS with no assurance their data will be protected from cyber criminals or restricted to this one idea. This costly and intrusive proposal is loaded with harmful potential, and we urge all Georgia citizens to join us in opposing it.”
“This blatant overreach by government would place an incredible burden on our state’s banking institutions and the small businesses that make up 99% of Georgia’s business community,” said Chris Clark, president and CEO of the Georgia Chamber of Commerce. “It undermines the privacy of everyday Georgians and simply outweighs any hypothetical, unproven gains.”
The proposal is part of the administration’s “tax compliance agenda” of the Americans Family Plan, and is being included in the $3.5-trillion budget reconciliation package currently in negotiation with Congress.
According to the president’s proposal, the administration said tax compliance measures are needed to ensure all Americans pay the taxes they owe. The White House said a tax gap exists in the U.S., which is the difference between taxes owed to the government and those actually paid.
According to the Treasury Department, that tax gap totaled nearly $600 billion in 2019 and will rise to about $7 trillion over the course of the next decade if left unaddressed, roughly equal to 15% of taxes owed.
Other states are pushing back as well. In a Facebook post, the Missouri Bank said, “The Biden administration has proposed requiring all community banks and other financial institutions to report to the IRS on all deposits and withdrawals through business and personal accounts regardless of tax liability.
“This indiscriminate, comprehensive bank account reporting to the IRS can soon be enacted in Congress and will create an unacceptable invasion of privacy for our customers,” the bank said. “If passed, the proposal would require financial institutions, like ours, to report the inflows (deposits) and outflows (withdrawals) of $600 or more, on personal and business accounts to the IRS regardless of customers’ consent.”
Biden himself has consistently maintained no one making less than $400,000 a year will experience a tax hike to pay for his Build Back Better agenda. “Not only that — you’ll get a historic tax cut, and see lower costs on things like child care and health care,” the president said in a recent tweet. “And all of it will be paid for by the wealthy paying their fair share.”