Financial Institutions Push Back Against Bill Giving IRS More Scrutiny Over Bank Accounts

NEW YORK (CBSNewYork) -- The Biden administration is trying to stop tax evasion and it's proposing doing so by requiring banks to report your account information to the IRS, but many financial institutions are balking at the idea.

From Vermont to Mississippi, banks across the country are posting calls to action imploring their customers to stop a proposal that would give the IRS more scrutiny over banks accounts.

"I think it's a private matter, what your bank account, what you have in your bank account or what you hold," one person said.

"Don't you have enough? Leave us alone," Hoboken resident Lissette Melendez said.

As CBS2's Christina Fan reports, the Biden administration is pushing the bill as a way to go after the rich and clamp down on tax evasion.

Financial institutions would have to give the IRS data on personal and business accounts that have total annual deposits or withdrawals over $600.

Critics like Jack Hanney, with Patriot Gold Group, call it an enormous breach of privacy.

"They are trying to guise it as going after the wealthiest of Americans, but the reality is this would affect more than 100 million American households," he said.

Treasury Secretary Janet Yellen has repeatedly defended the policy, saying it would help the IRS recover about $460 billion in revenue over the next decade.

On Tuesday, House speaker Nancy Pelosi echoed her support too.

"If people are breaking the law and not paying their taxes, one way to track them is through the banking measure," she said.

But opponents question if the government can securely protect the information they collect.

Hanney says he's received numerous calls from customers concerned about "keeping their money in financial institutions, keeping their money in the bank and having an interest in putting it into physical gold and silver."

The pushback appears to be putting some pressure on Democrats to scale back the proposal.

Pelosi noted in her comments Tuesday that the $600 threshold is not set in stone.

The Biden administration is hoping to use the recovered tax revenue to help fund its $3.5 trillion budget reconciliation plan.

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