Increased IRS reporting would be ‘risky and dangerous’
CUNA wrote Senators Tim Scott, R-S.C., Mike Crapo, R-Ida., and Rep. Drew Ferguson, R-Ga., in support of their Prohibiting IRS Financial Surveillance Act. The legislation would prevent and codify opposition to the implementation of a Treasury proposal to require financial institutions to report additional account holder information to the Internal Revenue Service (IRS).
“All financial institutions currently report to the IRS information related to actual taxable events for members and customers, interest earned, and mortgage interest paid, for example,” the letter reads. “The 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 dangerous.”
CUNA is also concerned with the proposal’s effect on credit unions.
“Privacy and data security are paramount issues for credit unions and their members. Whether it is the massive data breach at the federal Office of Personnel Management in 2014 or the recent IRS leak of federal tax returns of many wealthy Americans, we remain doubtful that such data will remain safe and private from hackers and other malevolent individuals,” the letter reads.
“Also, smaller credit unions would be especially burdened by this new proposal. From the increased costs of software upgrades to staff training, smaller institutions would perhaps need financial resources and additional time for implementation to meet the new requirements of the proposal,” it adds.