State lawmakers try to push back on IRS snooping agenda

Biden administration congressional Democrats backed off plan to allow IRS to monitor financial transactions

State lawmakers are stepping up against what some see as an attempted power grab by the Internal Revenue Service.

The Biden administration and Democrats in Congress backed off a plan to allow the IRS to monitor financial transactions of more than $600 per month and to monitor accounts that take in or spend $10,000 or more. Another scrapped proposal included facial recognition. However, legislators are concerned this could return.

However, the IRS successfully pushed a new requirement to require users of payment apps such as PayPal, Venmo, and Cash App to report commercial transactions totaling more than $600 per year.


So far, resolutions in Arizona and Florida have advanced to ask Congress to stop such proposals from going forward. Elsewhere, it has been a mixed record.

Signage outside the Internal Revenue Service (IRS) headquarters in Washington, D.C., U.S., on Friday, March 19, 2021. The IRS is delaying the April 15 tax-filing deadline to May 17, giving taxpayers an additional month to file returns and pay any outstanding levies. Photographer: Samuel Corum/Bloomberg

The Internal Revenue Service (IRS) headquarters in Washington, D.C., on Friday, March 19, 2021.  (Samuel Corum/Bloomberg / Getty Images)

"I filed this first-in-the-nation resolution to protect my constituents from the proposed and unwarranted snooping into private citizens' bank accounts by the Biden administration," Maine state Rep. John Andrews, a Republican, told Fox News.

Though the Democratic majority blocked the proposal, according to Maine Wire, Andrews said he’s glad other state lawmakers have taken this up.

"State legislatures are the ground level for public policy. We need to stand up, be proactive and protect those we represent," Andrews added. "Ultimately, this resolution failed in Democrat-controlled Maine. I am thankful that the resolution was picked up and filed in other statehouses across the country. That was my intention. Even in defeat, Maine can lead the way by sparking brushfires of freedom all across the country. State legislators need to be bold and fight to nullify all federal unconstitutional abuses of power."

The Arizona House of Representatives passed such a resolution, which is under consideration in the Senate. Rep. Shawna Bolick, the chairwoman of the House Ways & Means Committee in Arizona, sponsored the resolution that urges Congress to oppose the reporting requirements included in Biden administration proposals.

"I don’t like the idea of further intrusion into our privacy and businesses and people who are using some of these different apps to pay for things," Bolick said ahead of the committee vote. "I believe that this is a way to push back and let our delegation know we are opposed to this type of federal action that places a burden on those with modest means. It looks like there was some back and forth even in D.C., bipartisanship against some of the stuff the IRS was doing."

Still, some Democrats in the legislature pushed back against the resolution, contending the Biden administration is just seeking more information to avoid tax cheats.

PayPal app on a smartphone

PayPal Holdings Inc. on Tuesday, Feb. 1, 2022, forecast first-quarter revenue and profit well below expectations, as it prepares to take a hit from eBay Inc.'s ongoing move to ditch its payments services, sending its shares down 17.4%. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)

"I do think the goal of transparency and making sure everybody pays their fair share are very good goals," Arizona state Rep. Mitzi Epstein, a Democrat, said during the Ways & Means hearing. "I also think that the goal of trying to know when transactions happen using things like cryptocurrency and other financial instruments that are handled through brokerages, that’s appropriate to have those reported. I don’t think the intention of the Biden administration is the wrong way to go."

But such powers by the IRS might be unconstitutional and affect 127 million Americans, Bolick said, quoting the nation’s first Treasury Secretary Alexander Hamilton.


"Alexander Hamilton predicted in Federalist Paper 26 that state legislatures will be not only vigilant but suspicious and jealous guardians of the rights of the citizens against encroachments from the federal government," Bolick responded.

Florida state Rep. Bob Rommel, a Republican and chairman of the Florida Taxpayer Protection Caucus, sponsored a similar resolution that cleared both the Ways & Means as well as the Commerce committee. It awaits action by the full House.

"[T]he Biden administration’s tax increase proposal fails to consider cybersecurity risks and unjust burdens on law-abiding citizens, financial institutions, and small businesses, and the United States Congress should oppose this unprecedented intrusion into the privacy rights of Americans," says the Rommel resolution.

President Biden

President Biden waves as he and first lady Jill Biden board Air Force One, Wednesday, March 2, 2022, at Andrews Air Force Base, Maryland. (AP Photo/Patrick Semansky / AP Newsroom)

A Taxpayer Protection Caucus, aligned with the Washington-based Americans for Tax Reform, is in state legislatures across the United States.


Indiana state Sen. Erin Houchin, a Republican and also chairwoman of her state’s Taxpayer Protection Caucus, introduced a similar resolution, "urging the Congress of the United States to oppose the burdensome reporting requirements included in the Biden administration's tax increase proposals for fiscal year 2022."

The IRS did not respond to an inquiry this week on this story.