Democrats face growing storm over IRS reporting provision

According to a new report from The Hill “Democrats are facing a firestorm of criticism over a proposal to increase the amount of bank account information reported to the IRS, posing a challenge as they craft their wide-ranging social spending bill.”

The Hill writes “The proposal is a top priority of the Biden administration, which argues it will help the IRS go after wealthy tax cheats.

But it has come under a barrage of attacks from banks and Republicans, who say it raises significant privacy concerns. Financial institutions have been mobilizing their customers to speak out against the proposal to lawmakers.

Congressional Democrats are expected to make changes to the administration’s initial proposal, but are generally supportive of the idea. The increasing attacks on the proposal has prompted lawmakers and administration officials to go on the defensive.”

Natasha Sarin, deputy assistant secretary for economic policy at the Treasury Department, wrote “Ultimately, the President’s proposal seeks to pare back tax evasion by shedding some light on opaque sources of income that accrue disproportionately to the top 1 percent of earners.”

“As such, it is unsurprising that substantial resources are being deployed to defeat these efforts, because many tax cheats stand to lose from a fairer tax system,” she added.