Biden’s plan wants to give an extraordinary amount of new power to the IRS.
Take a look at this fact sheet from the Treasury Department, explaining a new provision that would require banks and financial institutions to start telling the tax agency what people have in their bank account, when money is moved around, and the like. This proposal, according to the fact sheet, “leverages the information that financial institutions already know about account holders, simply requiring that they add to their regular, annual reports information about aggregate account outflows and inflows. Providing the IRS this information will help improve audit selection so it can better target its enforcement activity on the most suspect evaders, avoiding unnecessary (and costly) audits of ordinary taxpayers.”
Giving the IRS more power to track money that moves into and out of your accounts is supposedly meant to help the tax agency go after the wealthiest taxpayers. However, this new authority has been described as being akin to giving federal tax “cops” even more of an excuse to claim a metaphorical probable cause to financially “stop and frisk” someone.