A controversial proposal to have banks report account information to the IRS is likely dead, Sen. Joe Manchin said Tuesday.
The centrist and key swing vote on the partisan legislation said on Tuesday that he spoke to President Joe Biden about the proposal, which envisioned banks reporting all account inflows and outflows of over $10,000 to the IRS to crack down on tax fraud. After the meeting, he noted it would probably not be in the plan.
Manchin said he told Biden the idea was “screwed up” and that the president concurred.
“So, I think that one is going to be gone,” the West Virginia Democrat said during an appearance at the Economic Club of Washington on Tuesday morning.
The Washington Examiner reached out to the White House about Manchin’s comments but did not immediately receive a response.
The first iteration of the proposal cast an even broader net and would have targeted all inflows and outflows over $600. However, that was met with fierce opposition from the banking industry and Republicans on Capitol Hill.
The idea has been championed by Sens. Ron Wyden of Oregon, who heads the Finance Committee, and Elizabeth Warren of Massachusetts. The proposal was also endorsed by Treasury Secretary Janet Yellen.
Wyden noted that IRS Commissioner Charles Rettig testified the tax gap could be as high as $1 trillion per year and that the reporting proposal would narrow that gap, which represents the amount of taxes owed versus the amount paid.
“Working people pay their taxes voluntarily because they know their employer is sending their numbers to the IRS,” Wyden said. “A wealthy business owner, on the other hand, is on an honor system. The arguments against information reporting have always been the same, and they’ve always been wrong.”
Republicans believe the bank reporting requirements violate privacy and would be logistically challenging. The GOP has pointed out the IRS recently had a massive leak of taxpayer documents to a media outlet, further degrading public trust in the institution.