CUNA urged Joint Economic Committee leadership to take a “close look at the dangers” of proposed increased Internal Revenue Service (IRS) reporting requirements. The committee met Wednesday to discuss various funding measure for pending reconciliation legislation.
Under this proposal, banks, credit unions, and other entities would be required to annually report to the IRS the gross inflows and outflows of account holders (businesses and individuals) with a breakdown for cash, transactions with a foreign account, and transfers to and from another account with the same owner.
“This new proposal would result in banks and credit unions turning over to the IRS sensitive account details that in and of themselves do not constitute taxable events. This would leave the IRS with a massive trove of personal financial data that would be used in a manner that is not detailed in the proposal. This is risky and unnecessary,” the letter reads.
CUNA notes that smaller credit unions will be especially burdened by the proposal.
“Credit unions and other financial institutions already process many federal tax information reporting forms. This new requirement further puts credit unions in the position of further policing their members and account holders,” the letter reads. “We believe that better tax compliance can be achieved through other means such as the IRS using its existing audit authority.”
CUNA issued an action alert calling on credit unions to send their concerns to Capitol Hill using its Grassroots Action Center. As of this week, nearly 500,000 messages have been sent.
Credit unions can also activate their members to send messages to Capitol Hill through CUNA’s Member Activation Program (MAP) community.