GOP sounds alarm on proposal to expand bank account data collection

Although the proposal would affect every American, Secretary Yellen has portrayed it as an attempt to fight "tax fraud and cheating" among the wealthy.

Secretary Janet Yellen, then chair of the Federal Reserve, testifies before Congress in 2016. (Federal Reserve/Flickr)

More than 200 members of Congress have signed a letter to Treasury Secretary Janet Yellen that pushes back against a proposal to expand data collection on American bank accounts.

Minnesota’s GOP congressional delegation — Reps. Tom Emmer, Pete Stauber, Michelle Fischbach, and Jim Hagedorn — joined the effort and previously led a Sept. 13 letter voicing concerns on the same issue.

According to Financial Regulation News, the initial proposal would’ve required financial institutions to “report certain transaction level data as well as information about the outflows and inflows on accounts over $600 to the IRS every year.”

Democratic politicians have agreed to abandon the $600 figure and raise it to $10,000, however, thereby drawing attention to successful Republican criticism of the proposal.

But the letter made it clear that the increase is not a satisfactory solution.

“Arbitrarily increasing the threshold to $10,000 … will still apply to individuals at every rung of the income ladder,” it said.

Emmer blasted the proposal in a statement published Thursday, the same day this latest letter was sent to Secretary Yellen.

“I am deeply disturbed by the continued efforts of the Biden Administration to expand IRS data collection on millions of Americans,” he said. “Over the last several months, Congressional offices have been inundated with messages from constituents concerned about the privacy implications associated with this proposal.”

“The Administration’s half-hearted attempt to mollify critics by suggesting they will simply increase the reporting threshold is dismissive and will still affect millions of Americans who do not want more of their personal data sent to the IRS as a means to pay for reconciliation,” he added.

Earlier this month, Secretary Yellen defended the proposal on a couple of occasions. In an Oct. 5 interview she said the IRS has the “wherewithal” to collect more data because “collection of information is routine” and “it’s just a few pieces of information about individual bank accounts.”

In another interview one week later, Yellen reiterated that the government is not going to be looking at anybody’s “individual transactions.” Although the proposal would affect every American, Yellen has portrayed it as an attempt to fight “tax fraud and cheating” among the wealthy.