U.S. Sen. Tommy Tuberville joined with Alabama bankers outside Protective Stadium in Birmingham on Tuesday to criticize a Biden administration plan for requiring banks to report transactions of $600 or more to the Internal Revenue Service.
Tuberville introduced a bill last month called the Protecting Financial Privacy Act, and several banking industry officials stood with Tuberville on Tuesday afternoon to support it.
Currently banks are required to report transactions of $10,000 or more to the federal government. Lowering the amount to $600 would be a burden on banks and credit unions and an invasion of privacy, several banking industry officials said.
“We support the senator; we support his efforts to limit the IRS’ intrusion on the accounts of consumers,” said Steve Swofford, CEO of Alabama Credit Union.
“It is a very harmful intrusion of privacy,” said Scott Latham, president of the Alabama Bankers Association.
“This administration is proving that their belief is that every American bank account holder is guilty until proven innocent,” said Chad Jones, CEO of First Bank of Alabama in Talladega. “That’s the burden that they want to pin on us.”
Grace Newcombe, director of federal advocacy for the Alabama Credit Union Association, called the $600 reporting threshold too burdensome. “The IRS reporting requirement proposed by the Biden administration would place a significant burden on our state’s credit unions,” she said. “Forcing credit unions to comply with this additional reporting requirement would be costly to all credit unions and would be nearly impossible for the small credit unions who lack the dozens of compliance lawyers and staff that some larger institutions employ.”
Tuberville said Democrats are looking for ways to finance their spending proposals, including a proposed $3.5 trillion infrastructure plan working its way through Congress.
“They are looking for ways to pay for this bill,” Tuberville said. “If they’re going to pay for it, they’ve got to tax the American people. This is one way they can do it.”
The IRS would need thousands of new agents to examine the financial details banks would provide them, resulting in more audits for U.S. taxpayers, Tuberville said.
“Any deposit or anything you buy goes straight to the IRS to give them a book on you,” Tuberville said. “To make more money off taxes, auditing’s the best way they can do it.”
Senate Democrats have so far blocked Tuberville’s bill.
“We’re just trying to put pressure on the Democrats, saying the American people don’t want it,” Tuberville said.
The Treasury Department has estimated the measure would raise about $460 billion over 10 years.
U.S. Speaker of the House Nancy Pelosi defended the proposal at a press conference on Tuesday, but said that the $600 figure is negotiable.
“Yes, there are concerns that some people have, but if people are breaking the law and not paying their taxes, one way to track them is through the banking measure,” Pelosi said. “That’s a negotiation that will go on as to what the amount is.”
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