Senate Housing Bill Requires eBay, Amazon, Google, and All Credit Card Companies to Report Transactions to the Government
Update: Senate Finance Committee Ranking Member Charles Grassley is pushing the bill.
Hidden deep in Senator Christopher Dodd's 630-page Senate housing legislation is a sweeping provision that affects the privacy and operation of nearly all of America's small businesses. The provision, which was added by the bill's managers without debate this week, would require the nation's payment systems to track, aggregate, and report information on nearly every electronic transaction to the federal government.
FreedomWorks Chairman Dick Armey commented: "This is a provision with
astonishing reach, and it was slipped into the bill just this week. Not only does it
affect nearly every credit card transaction in America, such as Visa, MasterCard,
Discover, and American Express, but the bill specifically targets payment systems like
eBay's PayPal, Amazon, and Google Checkout that are used by many small online businesses.
The privacy implications for America's small businesses are breathtaking."
"Privacy groups like the Center
for Democracy and Technology and small business organizations like the NFIB
sharply criticized this idea when it first appeared earlier this year. What is the federal
government's purpose with this kind of detailed data? How will this database be secured,
and who will have access? Many small proprietors use their Social Security number as their
tax ID. How will their privacy be protected? What compliance costs will this impose on
businesses? Why is Sen. Chris Dodd putting this provision in a housing bailout bill? The
bill also includes the creation of a new national fingerprint registry for mortgage
brokers.
"At a time when concerns about both identity theft and government spying are
paramount, Congress wants to create a new honey pot of private data that includes Social
Security numbers. This bill reduces privacy across America's payment processing systems
and treats every American small business or eBay power seller like a criminal on parole by
requiring an unprecedented level of reporting to the federal government. This outrageous
idea is another reason to delay the housing bailout legislation so that Senators and the
public at large have time to examine its full implications."
From the Senate
Bill Summary:
Payment Card and Third Party Network Information Reporting. The proposal requires
information reporting on payment card and third party network transactions. Payment
settlement entities, including merchant acquiring banks and third party settlement
organizations, or third party payment facilitators acting on their behalf, will be
required to report the annual gross amount of reportable transactions to the IRS and to
the participating payee. Reportable transactions include any payment card transaction and
any third party network transaction. Participating payees include persons who accept a
payment card as payment and third party networks who accept payment from a third party
settlement organization in settlement of transactions. A payment card means any card
issued pursuant to an agreement or arrangement which provides for standards and mechanisms
for settling the transactions. Use of an account number or other indicia associated with a
payment card will be treated in the same manner as a payment card. A de minimis exception
for transactions of $10,000 or less and 200 transactions or less applies to payments by
third party settlement organizations. The proposal applies to returns for calendar years
beginning after December 31, 2010. Back-up withholding provisions apply to amounts paid
after December 31, 2011. This proposal is estimated to raise $9.802 billion over ten
years. (freedomworks,
6.19.2008) Contact: Adam Brandon Phone: (202) 942-7698 Email: abrandon@freedomworks.org http://www.freedomworks.org/newsroom/press_template.php?press_id=2571