South Dakota State Treasurer Haeder Opposes requiring banks to turn over individual account info to IRS if they exceed $600 of inflow or outflow annually

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South Dakota State Treasurer Haeder Opposes requiring banks to turn over individual account info to IRS if they exceed $600 of inflow or outflow annually

PIERRE– State Treasurer Josh Haeder opposes the federal government’s policy proposal that would require financial institutions to turn over private citizens’ personal bank account information to the Internal Revenue Service (IRS) if they exceed $600 of inflows or outflows in an account.

Haeder said, “I do not believe the federal government should give the IRS the unprecedented and unconstitutional power to peer into law abiding American citizen’s private bank accounts. This would be one of the largest infringements of data privacy in our nation’s history and is a direct assault on law abiding private citizens’ financial disclosure.”

This would impact well over 100 million Americans who currently have a bank account. In the last year alone, over 127 million Americans qualified for the CARES ACT (Coronavirus Aid, Relief, and Economic Security Act) which deposited funds in excess of $600 into their bank accounts.  Funds deposited included $600 weekly boost in unemployment benefits from the Federal Pandemic Unemployment Compensation Program (FPUC) for the 25 million Americans who lost their job during the pandemic, roughly $3200 in Economic Impact Payments (EIP) and most recently Advanced Child Tax Credit Payments to millions of Americans.

“Simply put, this is a direct assault on all Americans of all economic demographics and includes all business and personal accounts,” said Haeder

Forcing banks to mine additional customer data that will be sent to the IRS without consent is a violation of the 4th amendment. See Carpenter v. United States as potential case supporting this violation.

Haeder said, “There is zero quantitative or qualitative evidence that this proposed measure will aid in collecting taxes from tax evaders.”

The IRS is a constant target of cyber criminals and in recent years has suffered significant breaches. This reporting requirement will consistently put a large amount of sensitive financial data in transit to the IRS and will be at constant risk of cyber-attack. The IRS does not currently have the capability to effectively utilize or protect this data.

If passed this will be one of the largest and continuous data mining exercises against Americans in our history and will put a constant strain on customer privacy, data security and overall safety of the banking system.

Designing a system to track and report all account inflows and outflows of $600 or more for every customer will have a devastating cost impact on small community banks and credit unions.

A goal of the banking industry is to reduce the number of unbanked Americans. A bank account is an important step in creating a positive relationship with financial institutions and is a steppingstone to financial health. Requiring banks to police accounts and constantly reporting to the government may create a lack of trust, causing many to close bank accounts increasing the number of unbanked Americans.

There are no guardrails in place to prevent any abuse of this information by the IRS or other government actors.

This proposal may cause massive increases in tax preparation costs for America’s small businesses which is the heartbeat of our economy.  Haeder said, “The federal government has a spending problem, fixing that should be the priority, not invading the privacy of law abiding citizens.”

18 thoughts on “South Dakota State Treasurer Haeder Opposes requiring banks to turn over individual account info to IRS if they exceed $600 of inflow or outflow annually”

  4. I agree this is senseless. My understanding is if I pay a condo HOA fee of $650 ;
    this would cause me to report and the Condo Association to report…seems overreach.

    Thanks Josh for having common sense!

  5. And keep it on topic, please (Specifically referring to the person who keeps trying to post a completely unrelated article)

    1. It was on topic– It was about reporting the movement or resources to the IRS… You have that story today..

  6. what will happen is people will make multiple transfers of $599 or less.
    Payments will be made weekly instead of monthly, or monthly instead of quarterly, etc.
    The banks will set everybody up with automatic deposits and withdrawals to accomplish this.
    Its just another dumb idea from the people who have been structuring their own payments and gifts for years and think the rest of us are too stupid to figure this out.

    1. Anonymous at 7:03…

      This is exactly what would — and should — happen if this stupid and destructive law is passed.

      1. if you look up the definition of financial structuring you learn that bankers call it “smurfing.”

        This idea was brought to you by little blue people, Little blue people with little blue brains who wear white hoodies.

        I remember the Beach Boys’ “Surfing Safari” song and think it could be adapted to “Smurfing Safari”

        let’s go smurfing

  7. The amount of transaction costs this will introduce is ridiculous. Just an asinine bill.

  8. This is what Big Brother does. This is clearly a way to spy on citizens and is being pushed by people who supposedly work for us. For those of you who haven’t read it yet, you should real “1984” by George Orwell, unless you don’t care about having any freedom in life.

  9. To add to the above discussion, recognize the Biden nomination for Office of Controller of the Currency-Saule Omarova, who has written a piece criticizing the present banking system. The theme of the writing is that she would replace private banking with a central banking system operated by the federal government. Omarova was a Lenin scholar and graduate from the University of Moscow, Russia. That may ramp up the federal invasion of privacy for citizens another notch.

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