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Protecting your financial privacy

Protecting your financial privacy

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You have probably heard of the partisan and reckless spending spree congressional Democrats are putting together, and that the final total of the plan will number in the trillions of dollars. But as much as the high price tag is concerning and will hurt Nebraska families, I also want to share with you some of the specifics of what’s actually in this measure.

Hidden deep in the plan is a provision that would give the IRS permission to spy on your bank account. The government already has the power to ask banks for information about transfers of more than $10,000 if they suspect ties to terrorism or money laundering. But President Biden’s “Build Back Better” plan would give the IRS broad authority to look at your personal finances for any reason at all.

Under the House of Representatives’ version of this plan, any payments made through third-party networks, such as PayPal or Venmo, would be reported to the IRS if they total more than $600. The Senate’s version of the plan is expected to contain a higher ceiling, but it would require banks and other financial institutions to report this information to the IRS as well.

Though we don’t know the final number Democrats in Congress will decide on, we do know the federal government simply has no business snooping around in Nebraskans’ bank accounts. Federal agents should not be able to see intimate details about everything from your next vacation to your monthly mortgage payment.

Nebraska State Treasurer John Murante joined 22 other state financial officers from across the country in a letter opposing the Biden administration’s plan. Their letter makes clear that this would be “one of the largest infringements of data privacy in our nation’s history.”

Democrats say this is necessary to close the federal “tax gap,” or the difference between the taxes that are owed and the amount that is actually collected. But there are better ways to close this gap than by invading the financial privacy of law-abiding Americans.

I recently cosponsored the Tax Gap Reform and Internal Revenue Service (IRS) Enforcement Act, which would bar new reporting requirements for individual and small-business bank accounts. At the same time, it would require the IRS to conduct a more efficient assessment of the tax gap and address it with tools already at their disposal.

Instead of hiring new IRS agents to review sensitive information, the bill would redeploy existing IRS manpower and resources so that the majority of high-income, noncompliant taxpayers are subject to enforcement actions. That’s a much better place to look for unpaid taxes than the bank accounts of everyday Americans. And it would require the U.S. Comptroller General to issue a comprehensive report to Congress about information they already have that could be used to address the tax gap, but which they aren’t currently taking full advantage of.

This bill would also prohibit the IRS from targeting taxpayers based on their political beliefs. That may not sound necessary, but it is: Under the Obama administration, the IRS targeted conservative organizations for heightened scrutiny during audits and applications for tax-exempt status. President Biden wants to hire as many as 87,000 new agents and give them sweeping new powers – but the truth is the IRS should not have routine access to your bank accounts. 

Thousands of Nebraskans have sent me messages about this issue, expressing their concerns about this potential government intrusion into our private lives. Organizations like the Nebraska Credit Union League have voiced their concerns as well. If this plan passes as currently proposed, the burden for reporting would fall entirely on financial institutions. The IRS is essentially asking Nebraska’s small banks and credit unions to do their job for them.

Reporting financial transactions to the IRS should be limited to cases of suspected criminal activity. But the Biden administration wants to treat every American like they could be guilty until they’re proven innocent.

That’s not how we do things in this country, and congressional Democrats should not invade the privacy of law abiding Nebraskans to pay for their massive spending spree.

Thank you for participating in the democratic process. I look forward to visiting with you again next week.

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