CUNA opposes a Treasury proposal to require financial institutions to report deposits, withdrawals, and transfers of business and personal accounts, it wrote with other organizations to Congressional leaders Wednesday. The proposal calls for financial institutions to report to the Internal Revenue Services (IRS) gross inflows and outflows of all business and personal accounts, as well as transfers between accounts of the same owner.
“We object to the broad, untargeted nature of the Treasury proposal. Collection of comprehensive financial account data to determine tax liability must be narrowly targeted,” the letter reads. “Treasury’s indiscriminate, blanket data collection would be unsupported by any reasonable suspicion of tax evasion.”
The letter adds that any use of personal financial data should be “rigorously justified” and notes the IRS has a “poor records of data security,” which exposes taxpayers data, compromises their privacy, and makes them vulnerable to identity theft.
“Further, we fear that new, intrusive account reporting would undermine the important policy goal of reducing the unbanked population… Indiscriminate sharing of financial account data with the IRS will only increase the challenge of reducing the unbanked population,” the letter reads.