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Biden Administration Plan Would Have IRS Monitoring American’s Bank Accounts

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OPINION: This article contains commentary which reflects the author's opinion


Some Americans are furious with part of the $3.5 trillion spending plan from Joe Biden and the Democrats that would allow the IRS to monitor bank transactions.

The administration claims the monitoring would prevent tax evasion and target audits, but some are concerned that it would violate the Fourth Amendment of the Constitution, The Daily Mail reported.

The proposal would require banks to report to gross inflows and outflows to the IRS, including transactions from Venmo, PayPal, crypto exchanges and the like in an effort to fight tax evasion. 

The IRS would know how much money is in an individual’s bank account in a given year, whether the individual earned income on that account and exactly how much was going in an and out. 

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Biden, Treasury Secretary Janet Yellen, IRS chief Charles Rettig and a number of Democrats in the Senate, most especially Elizabeth Warren, are pushing for the deep dive into individual financial transactions as part of an $80 billion plan to enforce tax compliance.

“The IRS is first and foremost, a law enforcement agency, and the Fourth Amendment protects against unreasonable searches and seizures in pursuit of, of looking for wrongdoing and criminal actions, so I think this is going to run into severe Fourth Amendment headwinds,” Taxpayers’ Protection Alliance Vice President Patrick Hedger said.

The Fourth Amendment of The Constitution reads, “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

But the Treasury Department said there is no reason for compliant taxpayers to be concerned, saying that the monitoring would simply help target those committing fraud.

“For noncompliant taxpayers, this regime would encourage voluntary compliance as evaders realize that the risk of evasion being detected has risen noticeably,” it said.

But Hedger warned that the policy could disproportionately injure poor people.

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“You’re going to push more folks into small cash transactions, you’re going to push more banking offshore … the big fish out there that do have sizable assets that are that are eligible for taxation offshore,” he said.

“This is the ultimate regressive tax,” he argued.

“You’re going to end up punishing the worst off among us … the lower income folks in this country have historically been the targets of aggressive IRS audits because they don’t have the CPAs and the lawyers to be able to fight back,” Hedger said.

“I don’t see why they need to be going after people, you know, just the average, the average Joe and start stooping on, you know, a $600 payment,” he said. “It doesn’t make any sense, these, this is, I mean this is beyond trying to pick out low hanging fruit.”

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Some expressed their fury over the proposal on Twitter.

“The Biden administration is attempting to empower the IRS to monitor every single withdrawal, deposit, and transaction you make from your personal banking accounts, PayPal, Venmo, etc. Separately, he wants to force vax you. Everything they lied and said Trump was— Biden is,” conservative commentator Candace Owens said.

“#Biden wants to track every deposit you make into a bank account no matter how small so he can #tax every single penny!” another Twitter user said.

“Why are they snooping on an average Joe over a $600 payment,” another said.

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“Yikes! Americans will not tolerate the federal government / IRS snooping on all banks transactions. So why is Congress pushing this massive new invasion of privacy?” another furious Twitter user said.

 

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