State AGs warn of challenge if Biden bank data collection passes
Georgia AG Chris Carr calls it an 'an illegal invasion of privacy'
Republican state attorneys general appear poised to challenge the constitutionality of a proposal allowing the federal government to collect data on bank accounts, regardless of how many accounts are privy to the snooping.
"Here’s the point, whether it’s $600 or $10,000, that doesn’t avoid the problem of being an illegal invasion of privacy and a violation of illegal search and seizure by the government," Georgia Attorney General Chris Carr told FOX Business.
President Biden and congressional Democrats originally backed a proposal to require banks to turn over customer account information to the Internal Revenue Service for any deposit or withdrawal of $600. This week, Democrats scaled back the proposal to require financial institutions annually report on transactions of more than $10,000.
The Democrats’ stated goal for this provision is stopping tax evasion. The proposal is part of the controversial $3.5 trillion spending bill by Democrats.
HOW WILL DEMOCRATS' PARED-BACK IRS BANK-MONITORING PLAN WORK?
Carr spearheaded a letter signed by 19 other GOP state attorneys general to Biden and Treasury Secretary Janet Yellen.
"The Federal Government combing through almost every American’s bank account without cause, or even suspicion, is unacceptable, illegal and contrary to the well-founded constitutional principles against illegal searches and seizures," states the Oct. 15 letter, sent before the recent adjustment to the proposal from $600 to $10,000.
The letter states this could force banks to provide consumer information on "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."
BANKS SLAM DEMOCRATS' NARROWER IRS BANK-ACCOUNT MONITORING PLAN: ‘NO FUNDAMENTAL DIFFERENCE’
The letter goes on to state this would also harm consumers.
"If this illegal scheme were allowed to be implemented, banks would likely be forced to pass costs in the form of fees or higher interest rates onto customers who are already struggling," the letter says. "Such additional costs would only serve to increase the numbers of persons that do not have access to banking services."
The legal challenges could be direct or indirect, Carr said.
"If this somehow passes, we as state attorneys general will use all tools at our disposal," he said.
The letter does not directly threaten litigation from the states. Carr said the AGs could challenge indirectly with amicus briefs by aiding plaintiffs, such as an individual consumer or financial institution. But, Carr said, it could also mean direct litigation with the states as plaintiffs.
"Standing is something we are reviewing," Carr said. "We argue that it is our duty to defend the interests and the constitutional rights of the people of our states."
The Treasury Department estimates tax dodging by the wealthiest 1% of Americans exceeds $160 billion per year.
CLICK HERE TO READ MORE ON FOX BUSINESS
"Today’s new proposal reflects the administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters," Yellen said in a statement.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
But a fishing expedition is no way to find tax cheats, Carr argues.
"If someone is violating tax laws, bring evidence or find probable cause to prosecute," Carr said. "Don’t just look at anyone with a bank account and presume they are cheating and force banks to be data collectors for the government. That’s what the Constitution protects against."