AG Schmidt warns Biden Administration new IRS reporting proposal is illegal government overreach

TOPEKA, Kan. (WIBW) - Attorney General Derek Schmidt, along with 20 other attorneys general, have warned the Biden Administration that this new IRS reporting proposal is an illegal government overreach.

Kansas Attorney General Derek Schmidt says requiring banks or other financial institutions to give the Internal Revenue Service access to almost every financial transaction is an illegal overreach by the federal government which will have devastating effects on the banking system and unintended consequences for Kansans.

In a letter sent to President Joe Biden and Treasury Secretary Janet Yellen, AG Schmidt said as part of a coalition of 20 attorneys voiced opposition to the proposal under consideration by the Biden administration. He said the proposal is meant as a source for additional revenue to cover massive federal spending increases.

“Your proposal seeks to leverage private transaction information by effectively transforming banks into large-scale data processors for the IRS, forcing the banks to provide private information regarding common transactions such as rent payments, paying for groceries, and other transactions that are part of everyday life of Americans who have done nothing wrong, are not under suspicion of having done anything illegal and for which the government has no evidence or reason to believe are guilty of civil or criminal violations,” Schmidt and the other attorneys general wrote.

Schmidt said the attorneys general argue that banks throughout the nation will have to transform the way they do business in order to comply with the proposed requirements, including investing large amounts of money in data collection and other systems. He said consumers will be punished as banks would likely pass on costs in the form of fees or higher interest rates, not to mention the centralized storage of sensitive information would provide cybercriminals with another target to exploit with information about nearly every American.

Schmidt said the attorneys general wrote that if stopping financial criminals or punishing those who evade taxes is the goal of the administration, they will gladly help find solutions based on the rule of law, but government snooping on virtually every American with a bank account is not the right way to go.

To read the full letter, click HERE.