Biden’s Proposal to Empower I.R.S. Rattles Banks and Their Customers

Concerns about the potential provisions have come up frequently, according to Jim Reuter, CEO of FirstBank near Denver, including over coffee with a small-business owner in early October.

‘I pay my taxes so why are you sending additional information to the I.R.S.?’ is their conclusion,'” Mr. Reuter recalled this. “I said that I agreed with them.” You can count on us. What the bank doesn’t have the authority to do is send the customer’s information to an outside party, which is not what we do as a bank.

Controversial tax reform proposal critics have argued that the Internal Revenue Service (IRS) lacks the capacity to process and protect so much data.

It’s something I’ve been asked about at parks, grocery stores, and convenience stores around my district,” said Indiana Representative Trey Hollingsworth, a Republican, when he appeared before Ms. Yellen in a congressional hearing last month. We have people who are terrified that a system that can be used against them is going to emerge.

“Texans are terrified of the IRS,” said a spokesman for Rep. Kevin Brady of Texas, who is the top Republican on the House Ways and Means Committee, and that his boss receives at least three or four constituent inquiries about the proposed disclosures every week.

One of the schoolteachers who visited Ms. Castilla two weeks ago to express her concerns about government intrusions into her personal finances was a community banker in Oklahoma. Ms. Castilla said she told the teacher that she thought the proposal was an overreach, and that banking associations and Oklahoma’s congressional delegation were fighting it, adding that she was aware of the opposition.

A $10,000 threshold would still be burdensome for her bank, according to Ms. Castilla. ‘This would require a huge amount of infrastructure,’ she explained.