ACTION ALERT: Federal Proposal Imposes Burdensome New Reporting Requirements on Banks
The House Ways & Means Committee has released legislative text for the $3.5 trillion spending plan. The current draft does NOT presently include the IRS financial institution information reporting mandate. However, we continue to urge bankers to outreach to Congressional representatives as a means to prevent placement of such a provision in future versions of the measure. Thank you for your efforts!
A proposal contained in President Biden’s American Families Plan Tax Compliance Agenda requires that financial institutions increase the level of information reported about deposit accountholders to “shed light on those taxpayers who misreport income.”
While few details have emerged, the proposal is framed by the Administration as closing the “tax gap”. The proposal works off IRS Form 1099-INT reports from financial institutions and requires the reporting of gross inflows and outflows on all business and personal accounts. Among other issues, this proposal raises significant concerns with a customer’s expectations of privacy, increases risk to an accountholder’s personal information when there are government data breaches and cyber-attacks, and imposes substantial new compliance obligations for banks.
We urge bankers to outreach to their Congressional representative to express opposition. The ABA has established a simple process to facilitate this critical outreach.
Click here to TAKE ACTION.