There is a proposal under consideration by the Administration and congressional allies, as part of their reckless tax-and-spending plan, to create a reporting scheme where financial intermediaries report to the Internal Revenue Service (IRS) on customer “inflows and outflows.”  Under this dragnet, local banks, credit unions and payment providers will essentially be turned into agents of the IRS, monitoring and reporting on inflows and outflows of deposits and withdrawals made in private accounts.

This proposal raises a number of serious concerns, paramount being privacy.  It also sparks concerns with data security, as the IRS has a history of leaks, hacks and other violations of taxpayer confidentiality.  Low- and middle-income earners would certainly be swept into this dragnet.

The proposal is not popular among Americans.  Polling conducted by Morning Consult shows that two-thirds of voters oppose the IRS reporting plan. 

67 Percent of Voters Oppose IRS Reporting Proposal


After significant backlash from concerned Americans, the Administration issued a “fact sheet” on an as yet unrevealed updated proposal.  Two of the changes included:

  • Raising the reporting threshold on inflows/outflows to $10,000 from $600; and
  • New carve-outs for wage and salary earners and federal program beneficiaries.

These updates do nothing to address privacy invasion, due process, data security concerns, or the breadth of the dragnet. 

Raising the threshold from $600 to $10,000 would still sweep in most Americans.  According to the most recent data available from the Bureau of Labor Statistics, the average taxpayer in America spends about $63,000 a year.  What do they spend it on?  The averages: housing, $20,679; transportation, $10,742; personal insurance and pensions, $7,165; health care, $5,193; groceries, $4,643; other meals, $3,526; entertainment, $3,090; cash contributions, $1,995; apparel and services, $1,883; education, $1,443; personal care, $786.  For a grand total of the average American running $63,036 through their accounts in a year.  So does raising the total to $10,000 really stop the IRS from accessing very many accounts?  No, outflows from accounts for the average taxpayer are more than six times more than that threshold. 

Each proposed exemption creates more confusion and complexity for taxpayers, as well as complexity and costs to private reporting institutions.  What about non-wage workers, self-employed hair stylists, convenience store owners and farmers?  Not every non-wage worker is a “millionaire” or “billionaire.” 


Consider the following categories, and whether you would potentially be swept into this regime for hitting $10,000 in annual “inflows and outflows” in any of your financial accounts.

Expense MonthlyAnnually
Shelter (mortgage, rent, taxes, etc.)    
Household (utilities, cell phone, cable, maintenance, etc.)    
Transportation (public, parking, gas, etc.)    
Health (insurance, medications, doctor visits, etc.)    
Student Loans (interest/principal payments, etc.)    
Personal (gifts, charity, entertainment, hobbies, etc.)    

Think of other scenarios.  What if you receive child support payments or alimony?  Transfer money between checking and savings?  What about transfers among immediate family members, like a parent helping to support their college-aged student with money for rent, food or tuition?  If the IRS intends to exempt any or all of these scenarios, the proposal is useless.  However, if it does not, it will certainly drag virtually every American into this dragnet, triggering audits and headaches for everyday Americans.

Making sure tax cheats pay the taxes they owe is important, but law-abiding Americans’ privacy must not be trampled to accomplish that goal.  The IRS does not need to have access to the accounts of every American.  It cannot be trusted with this information, and I will continue to fight enabling this broadened authority.  This lazy and destructive proposal must be shelved for good.   



  • Sent a letter to U.S. Treasury Secretary Yellen asking for details of the proposal.
  • Led an October 12 roundtable discussion with concerned Idahoans to discuss the reporting scheme.
  • Delivered remarks on the Floor of the U.S. Senate calling on Americans to loudly reject the intrusive IRS reporting regime.
  • Led a press conference with other Republican members of the Senate Banking and Senate Finance Committees to blast the IRS bank reporting dragnet.
  • Introduced legislation with Senator Tim Scott to block Democrats’ IRS financial reporting proposal.
  • Introduced the Tax Gap Reform and IRS Enforcement Act to add significant guardrails around IRS funding to protect taxpayer rights and privacy.