Republicans Warn Biden’s IRS $600 Disclosure Plan Could Lead to ‘Surveillance State’

Sen. Rick Scott (R-Fla.) speaks during a Senate Armed Services Committee hearing on Capitol Hill in Washington on Sept. 28, 2021. Patrick Semansky-Pool/Getty Images

Republicans are sounding the alarm over a proposal tucked inside the Democrats’ 2,500-page $3.5 trillion Build Back Better Act that would expand the Internal Revenue Service (IRS) and allow the agency to have access to any bank transaction of $600 or more.

The proposal would give the IRS further access to anyone’s financial information, which Republicans say amounts to federal overreach and a “surveillance state.”

“How can you possibly justify to the American people that the IRS should be snooping around in their bank, retirement, or investment accounts,“ said Sen. Rick Scott (R-Fla.) said on Oct. 7 from the Senate floor. ”There’s only one explanation, and it’s simply terrifying: The Democrats want to control how you spend your money.”

“I want to be very clear what President [Joe] Biden’s proposing here is as close to policy from communist China that we’ve seen in the United States,“ Scott added. ”In oppressive regimes like Cuba and communist China we’ve come to expect the surveillance state, where the government has access to every part of a person’s life. Now Joe Biden wants to bring that to America.”

Rep. David Kustoff (R-Tenn.) during a Sept. 30 House oversight hearing questioned U.S. Secretary of Treasury Janet Yellen about the new policy of increasing the number of IRS agents and the IRS’s ability to monitor low-level transactions.

“We have proposed both augmenting the resources of the IRS so that it can hire qualified auditors and augmenting the information flow so that the IRS gets insight opaque sources of income, and both together we believe can serve to greatly address the $7 trillion estimated tax gap that we'll see in this country,” said Yellen.

When pressed by Kustoff about the $600 dollar disclosure policy, Yellen defended the new plan.

“I don’t believe it’s an invasion of privacy and look, the IRS gets a great deal of information that it needs in order to make sure the taxpayers comply with the tax code,” Yellen said.

Rep. Richard Neal (D-Mass.), chairman of the House Ways and Means Committee, has praised the $80 billion investment in the IRS and the agency’s ability to access small bank transactions, saying Democrats want to ensure tax fairness and to make sure the wealthy do not dodge their tax obligation under the new tax plan.

Sen. Mitch McConnell said he opposes the new tax plan in the Democrats’ budget of $80 billion of funding for the IRS.

“They want to finance their spending spree by effectively treating every ordinary American as if they were under IRS audit,” said McConnell. “I must have forgotten when the president campaigned on giving everybody their own audit!”

Sen. Tommy Tuberville (R-Ala.) urged the Senate to pass his legislation, the Protecting Financial Privacy Act (S.2953), which would prevent the IRS from accessing financial transaction data of their customers, building on a pre-existing law, the Bank Secrecy Act.

“The bulk data collection they are proposing will do nothing to close the so-called tax gap,” said Tuberville in a press statement released Oct. 7. “All it does is violate the liberty of every freedom-loving American who values their financial privacy.”