ABA and several financial trade groups wrote to Congress yesterday opposing a revenue-raising provision in H.R. 1295, a trade preferences bill. The bill would require depository institutions to file reports with the IRS on all interest-bearing and non-interest-bearing deposit accounts. Reports are currently required only for interest-bearing accounts starting at $10 in interest.
“Should this provision be enacted, taxpayers will be awash in new 1099s reporting de minimis amounts of interest,” the groups said. “Additionally, this new reporting requirement will impose substantial costs on the financial services industry that far exceed the revenue that will be gained by the proposal.”
The groups added that the unnecessary 1099s — which for many consumers would report zero interest income — are likely to confuse taxpayers and post “an unnecessary nuisance for nearly every American.”