Onerous Tax Reporting Provision Removed from Trade Bill

Following advocacy by ABA, state associations, bankers and other financial trade groups, a controversial revenue-raising provision in trade preferences bill H.R. 1295 was removed. The removed provision would have required 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 ABA and several trade groups said in a letter last week. “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.”

ABA EVP James Ballentine thanked “all of the bankers and state associations that weighed in with members of their congressional delegations on this issue,” adding that ABA “will continue to monitor any additional attempts to include this type of provision in other bills.”