Sen. Joe Manchin said he does not believe the proposal to allow the IRS to snoop on account transactions will make it into Democrats' social spending plan, as he said President Biden agreed with him that it is 'screwed up.'
The West Virginia Democrat said he told Biden in their Sunday meeting: 'This cannot happen. This is screwed up.'
'So he says, I think Joe is right on that one.' So I think that one is gonna be gone,' Manchin said at a breakfast meeting of the Economic Club.
Manchin said he was not satisfied when Democrats simply raised the reporting threshold from $600 to $10,000 in aggregate transactions per year.
'Even if it's $10,000 that’s only $800, $900 a [month].'
A group of 99 banks and industry groups wrote a letter to President Biden on Monday urging him to drop his proposal to hand over transaction data to the IRS, noting that they too were unsatisfied by raising the threshold. The organizations that claimed to represent business and financial interests urged the White House to withdraw support for the measure and find 'more targeted measures' to reduce the tax gap.
The proposal to hand over data on all aggregate inflows and outflows of accounts with more than $600 in total transactions drew sharp outcry from Republicans and banks alike, prompting Democrats to raise the amount to $10,000. But, the letter said that raising that cap amounted only to 'cosmetic' changes.
The banking groups lauded the administration's 'good-faith attempt' to make sure all Americans pay the taxes they owe, but wrote: 'our members, and the American people, believe that they have a reasonable right to privacy and this overly broad proposal to report gross annual inflows and outflows from nearly every account is disconnected from its purported narrow purpose of focusing government scrutiny on Americans with actual income above $400,000.'
'The privacy concerns for Americans who pay their taxes and would be swept into this account reporting program are real and should not be taken lightly,' the letter continued.
The letter was signed by a wide variety of groups, from the American Bankers Association, the American Farm Bureau Federation and the Chamber of Commerce to the Asian American Hotel Owners Association, the National RV Dealers Association, the National Grocers Association and the North American Die Casting Association.
Under the revised policy, accounts with $10,000 or more in total deposits and withdrawals, excluding wage income, would be subject to greater scrutiny. Banks would have to send over their aggregate inflow and outflow to the IRS to help the agency target its audits.
The inflow would not take into account salary or wage income, which is already under the purview of the IRS under W-2 forms. It would also leave out income in the form of Social Security checks.
'At its core, this program that has not had a significant study or detailed examination to show consumer impact, will collect financial “metadata” on nearly every American in the hope that the IRS will be able to discern patterns in aggregate numbers that do not correspond to tax liabilities and target audits only to those who are breaking the law,' the letter read.
'This is a substantial expansion of the IRS’s authority that, once established, is sure to