With bipartisan opposition growing for a controversial proposal that would require financial institutions to report information on gross inflows and outflows on all customer accounts above a certain de minimis level, House Democrats have reportedly omitted the provision from their current draft of the budget resolution. This news comes after an intense advocacy push by the American Bankers Association, state bankers associations, bankers and bank customers.
ABA President and CEO Rob Nichols welcomed the news. “Americans should honor their tax obligations, but forcing financial institutions to share private financial data from millions of customers with the IRS was the wrong way to reduce the tax gap,” Nichols said. “We want to thank the many lawmakers in both parties who understood the significant privacy concerns with the proposal and fought to keep it out of the reconciliation bill. We will continue to stay vigilant and educate members on this flawed proposal as the bill proceeds through the House and Senate.”
While the proposal has been dropped from the House bill, there is still a possibility that it could be added back in at a later point in the legislative process. ABA is urging banks and their customers to keep the pressure on lawmakers to ensure the proposal remains off the table in the days ahead.