Banks will be pivotal for the success of a new tax deduction for certain automobile purchases, so the IRS should consider revisions to a proposed rule implementing the policy to enhance its feasibility, American Bankers Association SVP Joey Connor told the agency today.
The One Big Beautiful Bill Act passed last year by Congress includes a car loan interest deduction of up to $10,000 on qualifying purchases. ABA previously submitted recommendations to the IRS on technical changes to the proposed rule to ease the burden of implementing the deduction, both for consumers and the agency.
During a public hearing at the IRS, Connor outlined ABA’s recommendations, such as extending the relief provided to lenders for failing to file the records needed under the new law until 2027. The association also recommended requiring lenders to report interest received on specified passenger vehicle loans and sought clarification on several issues, such as the reporting obligations for lenders regarding deceased borrowers.
“Making these adjustments prior to promulgating final regulations will help ensure taxpayers receive accurate data, reduce taxpayer confusion and give the IRS standardized, verifiable information it can use at scale,” Connor said.
