JPMorgan CEO: Biden overdoing IRS surveillance would be 'terrible'

JPMorgan Chase CEO Jamie Dimon warned that President Biden’s proposal to crack down on wealthy tax evaders by requiring banks to report more customer information on most Americans' accounts to the Internal Revenue Service could have the potential to be "terrible."

Speaking with FOX Business’ Maria Bartiromo in an interview that aired on "Mornings with Maria" on Tuesday, Dimon pointed out that there has been "a big uproar" about the proposed surveillance. 

"The proposal was that, that you wouldn’t report transactions, you would just report cash in and cash out type of thing so that the IRS would have something to go look at in order if they think the taxes you declared are dramatically different than what went through your checking account," he said, noting that "there has been a big uproar about that."

Dimon stressed that he does "think people should pay their taxes."

He argued that the surveillance will have to be enacted "by legislation for a whole bunch of different reasons."

"If it’s part of a legitimate thing that gets people to pay taxes, it’ll be fine," Dimon told Bartiromo. "If they overdo it, it would be terrible."

Under the plan, banks, credit unions and other financial institutions would be required to annually report customers' account deposits and withdrawals of $600 or more to the IRS. While individual transactions would not be listed, the policy would apply to almost every Americans' bank account.

The proposal has elicited a fierce backlash from banks who say it would increase compliance costs and add to the already existing burden the industry faces in turning over information to the government and from Republicans who say it amounts to the worst type of government overreach. 

Despite the criticism, the White House has stood by the plan. In a public memo in October, Natasha Sarin, Treasury's deputy assistant secretary of economic policy, said the proposal has been "marred by misinformation, as opponents have elevated the pernicious myth that banks will have to report all individual customers' transactions to the IRS." 

The Treasury Department argued that collecting additional information would help the IRS sniff out individuals who may be skirting their taxes.

Banks already report millions of transactions a day to the Financial Crimes Enforcement Network for any transaction that exceeds $10,000 – part of banks' anti-money laundering requirements. 

Later in October, the Biden administration endorsed a scaled-back version of the proposal.

Under the new plan that Senate Democrats unveiled, banks, credit unions and other financial institutions would be required to report annually on accounts with deposits and withdrawals worth more than $10,000, rather than the $600 threshold that President Biden initially proposed. 

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The tightening of the plan followed a steady lobbying campaign from banking groups and other industry organizations that warned the original proposal would increase compliance costs and add to the already existing burden the industry faces in turning over information to the government, while Republicans have slammed it as the worst type of government overreach. 

In a September letter addressed to House Speaker Nancy Pelosi, D-Calif., and Minority Leader Kevin McCarthy, R-Calif., more than 40 banks urged lawmakers to vote against such a proposal, warning it could create a "tremendous liability" for all involved by requiring the collection of financial information for the majority of Americans "without proper explanation of how the IRS will store, protect and use this enormous trove of personal financial information."  

JPMorgan Chase was not involved in the letter. 

The White House defended the plan, writing in a memo to congressional Democrats that requiring banks and financial institutions to provide a "little bit of high-level information" to the IRS on account flows gives the agency more information about wealthy Americans' earnings from investments and business activity. 

It has stressed that banks will not have to report individual transactions to the IRS, but rather "basic, high-level information on account inflows and outflows" and that audit rates for Americans earning less than $400,000 annually would not go up. 

"Imagine a taxpayer who reports $10,000 of income; but has $1 million of flows in and out of their bank account," the administration said in a memo to congressional Democrats. "Having this summary information will help flag for the IRS when high-income people under-report their income (and under-pay their tax obligations)."

"If I was a regulator of the government, I would think about ways how you can get more people paying their taxes, but don’t be overburdening both companies [and] individuals with worthless type of reporting," Dimon told Bartiromo. 

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The Treasury Department estimated the original version of the plan could generate as much as $700 billion over the next decade, revenue that would be used to pay for Democrats' sweeping social spending plan.

Even with the slimmer scope, however, Republicans have continued to slam the contents of the bill. 

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FOX Business’ Megan Henney contributed to this report.