Jeff Landry has joined 19 fellow state attorneys general in calling on the Biden administration to withdraw a proposal requiring banks to report to the IRS when funds move in and out of financial accounts containing more than $600.
In an Oct. 15 letter to President Biden and Treasury Secretary Janet Yellen, the attorneys general argue that the federal plan, which aims to help the Internal Revenue Service monitor possible tax cheating, is unconstitutional and places unneeded burdens on financial institutions.
“Joe Biden’s 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,” the Louisiana attorney general said in a prepared statement. “I will do all that I can to fight this reckless authoritarianism and protect the people of Louisiana, their property and their privacy.”
If the plan were to be implemented, financial institutions would have to invest heavily in data collection systems, which in turn could be magnets for hackers seeking private financial information, according to the attorneys general’s letter.
The Louisiana Bankers Association also sees the federal proposal as an additional financial burden on financial institutions as well as something that is drawing consumer opposition.
“I have been told by Louisiana bankers that they have customers who have come to them concerned about this proposal,” Robert Taylor, the association CEO, told the Louisiana Record in an email. “Some have said they will withdraw their money from the bank if it should become law. There are significant concerns about the privacy of Americans and the ability of the IRS to protect that privacy.”
Most people view the IRS as already having adequate power to enforce the current federal tax laws, according to Taylor.
“Having private companies police their customers’ inflows and outflows in their accounts and then turn the information gathered over to the IRS does not seem to be a way for the government to enforce its tax collection,” he said.
The Louisiana Credit Union League has also expressed similar concerns about the administration’s proposal.