Florida Lawmakers Express Concerns over IRS Tax Reporting Proposal

Rep. Stephanie Murphy (D-Fla.) today said that proposed requirements for banks to report information on gross inflows and outflows for all accounts above a $600 de minimis level “give me pause,” given the potentially burdensome effects on small community banks. Speaking at the American Bankers Association Annual Convention in Tampa, Florida, Murphy expressed her view that “we’re going to have to really shape it in a way that’s carefully balanced,” by possibly “raising the required disclosure level or even evaluate if that’s the best method.” ABA and other financial trade groups continue to oppose the reporting requirements, regardless of the de minimis threshold.

Murphy discussed the potential implications of the reporting framework for small banks and bank customers, noting that it’s a “really dangerous paradigm for us to create these sorts of disclosure requirements and other incentives that shifts your bankers away from focusing on their core business model, which is to evaluate business risk and loan risk, and instead they’re worried about compliance risk.”

She added that “at a time when there is historic distrust of institutions, I think it would be incredibly damaging to the industry and to our economy to have disclosure requirements down at that level. There will be communities that will then go unbanked . . . rather than to have the government in their business at that level. We need to be very mindful of that as an unintended consequence of this effort.”

Sen. Marco Rubio (R-Fla.)—who also spoke to bankers through a pre-recorded video message—also panned the controversial Biden administration proposal to give the IRS what he called “unprecedented authority and access to financial transactions.” Rubio noted that “not only does this have dramatic implications for your work, but it risks the protection and the privacy of hardworking Americans who that have entrusted their local banks for years.”