Treasury Shares Tax Data with DHS, Raising Privacy Concerns

Financial privacy in the United States has eroded significantly since the 1970 Bank Secrecy Act, with banks acting as government watchdogs through mechanisms like suspicious activity reports, expanding further after 9/11. Meanwhile, the Trump administration faces criticism from Democrats over developing a centralized database compiling Americans' personal information across federal agencies, although Republicans argue that improved data sharing is crucial to preventing taxpayer fraud and improper payments, as seen during the pandemic. In Europe, eIDAS 2.0, effective from late 2024, enhances digital identity verification and compliance with anti-money laundering laws, streamlining secure online financial services and enabling selective data disclosure through EUDI-Wallets, fostering privacy and cross-border digital transactions. In the UK, the Economic Crime and Corporate Transparency Act 2023 regulations have been enacted to bolster anti-money laundering and corporate transparency measures, requiring director ID verification across the country. Additionally, the U.S. Treasury has entered an information-sharing agreement with the Department of Homeland Security, allowing the IRS to share certain tax return information for criminal enforcement purposes, raising concerns about taxpayer data privacy amid ongoing scrutiny of the IRS under the Trump presidency. These developments reflect a complex balance between enhancing security and fraud prevention while confronting growing public concerns over privacy and data protection.