Weaponizing the IRS

Press Release

For months President Biden and Congressional Democrats have single-mindedly focused on pushing their tax and spending agenda across the finish line. While my Republican colleagues and I have made progress in keeping some truly terrible ideas, like repealing stepped-up basis, out of the package so far, our work against these proposals continues.

Another Biden-proposed tax change I have been working to defeat with the potential to harm farms and small businesses across Nebraska is requiring banks and credit unions to begin reporting on a large share of their accountholders to the IRS. I have heard from thousands of Nebraskans opposing this specific proposal, and I have been working with my colleagues on the Ways and Means Committee to defeat it.

While Democrats stepped away from their initial, alarmingly low reporting threshold of $600 per year, their latest proposal would create a new set of problems. Their plan is to require reporting on accounts with inflows and outflows of $10,000 or more per year with possible exemptions for payroll income and payments like mortgage payments. Although the combination of a higher reporting threshold and proposed exemptions would likely reduce the number of accounts reported, it would create more work for local banks and credit unions who were already alarmed by the $600 requirement. Right now, banks do not track the purpose of every payment, and this proposal could very well force them to do that. In addition, it could be used by the IRS to refocus their auditing effort on law-abiding taxpayers who own their own business -- something the Biden Administration has said it wants to do.

Let me be clear; this IRS bank reporting plan is an invasion of privacy. From the illegal targeting of conservative groups during the Obama Administration to the massive leak of taxpayer data to the press under President Biden, the IRS has a long track record of abusing taxpayer information for political purposes, and this plan would provide a whole new set of opportunities for abuse.

In order to combat the Biden Administration's gross disregard for nearly every working American's bank accounts, I have joined my Ways and Means Committee colleagues in sending letters to Treasury Secretary Janet Yellen opposing the bank reporting proposal and asking for its withdrawal. Along with the letters, I cosponsored Congressman Drew Ferguson's bill, the Prohibiting IRS Financial Surveillance Act, to do just as the title suggests, prohibit the weaponization of the IRS to monitor the bank accounts of hardworking Americans.

While IRS reporting was not included in the Build Back Better blueprint released by President Biden and Speaker Pelosi this week, we cannot assume the idea is dead. The Democrats majority has said it intends to include a repeal of the cap on the State and Local Tax deduction -- a tax cut for high income taxpayers from states like New York and California - in the package, and this reporting proposal has been identified as a revenue offset for that provision. As alarmingly as the Democrats proposal is, rest assured, I will keep fighting against this provision and keep fighting on behalf of the Third District.

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