The American Bankers Association, along with more than 40 trade associations, sent a joint letter to House leadership and members today expressing concerns about a controversial tax reporting provision floated by the Biden administration that would expand mandatory IRS reporting on bank account information. The proposal would require financial institutions to track and provide the IRS with the inflows and outflows of every account above a de minimis threshold of $600.
“While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population,” the associations wrote. “In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information. We believe that this program is costly for all parties, not fit for purpose, and loaded with potential for unintended and serious negative consequences.”
While the proposal was not included in the earliest stages of the bill’s consideration, administration officials have signaled in recent days that it remains a priority for the Biden White House. ABA continues to urge banks and their customers to contact their representatives to ensure that this provision stays out of any future versions of the bill. To help engage bank customers on this issue, ABA has created sample language for customer communications and social media posts banks can use. The association continues to closely monitor developments related to the bill and will provide additional updates as events warrant.