GOP Senator Cynthia Lummis hammers Biden’s proposal for banks to report every transaction over $600 to the IRS

  • Lummis said people will ‘find alternatives’ to thwart the IRS’ leering eye 
  • ‘I am astounded by what you’re supporting and proposing. I think it’s invasive. I think privacy for individuals is being ignored’ Lummis said 
  • Yellen said requires banks to hand over the IRS data on aggregate inflows and outflows of an account for transactions over $600
  • She noted that the tax gap is expected to swell to $7 trillion over the next decade
  • The proposal, meant to help pay for the $3.5T budget reconciliation plan, is expected to generate $460 billion over the next decade
  • It would require banks to report gross inflows and outflows to the IRS, including transactions from Venmo, PayPal, crypto exchanges

Wyoming Republican Sen. Cynthia Lummis tore into Treasury Sec. Janet Yellen on Tuesday for her support of a Biden proposal to require banks to hand over transaction data over $600 on individual bank accounts.

‘Banks do not work for the IRS,’ Lummis said. ‘This is invasive of privacy. Wyoming’s people literally will find alternatives to traditional banks just to thwart IRS access to their personal information, not because they’re trying to hide anything, but because they are not willing to share everything.’

The senator asked Yellen if she was ‘aware how unnecessary this regulatory burden is?’

‘Do you distrust the American people so much that you need to know when they bought a couch?’ Lummis asked. ‘Or a cow?’

‘I am astounded by what you’re supporting and proposing. I think it’s invasive. I think privacy for individuals is being ignored. And I think that treating the American people like they are subjects of the government is unconscionable.’

Yellen told Lummis that she believes the senator is misunderstanding the proposal, as it requires banks to hand over the IRS data on aggregate inflows and outflows of an account for transactions over $600, rather than details on each individual transaction.

Yellen noted that the tax gap is expected to swell to $7 trillion over the next decade, roughly 15% of taxes owed.

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.

The deep dive into financial transactions would be funded by allocating an additional $80 billion to the IRS.