More than 40 associations representing a broad cross-section of financial and business interests led by the Consumer Bankers Association (CBA) and American Bankers Association (ABA) today sent a letter to Speaker of the House Nancy Pelosi (D-CA), Minority Leader Kevin McCarthy (R-CA) and Members of the U.S. House of Representatives urging them not to move forward with a proposal under consideration as a part of the reconciliation package to establish an expansive new tax information reporting regime that would directly impact almost every American and small business with an account at a financial institution.
In the letter, the groups write:
'This proposal, as described by the Department of Treasury, would require financial institutions and other providers of financial services to track and submit to the IRS information on the inflows and outflows of every account above a de minimis threshold of $600 during the year, including breakdowns for cash. 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. 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.'
In addition to increased taxpayer confusion and costs, instituting this new reporting regime will undermine efforts long underway to strengthen financial inclusion, especially among underserved populations. Urging lawmakers to oppose any effort to advance this proposal, the groups continue:
'Privacy concerns are cited as one of the top reasons why individuals choose not to open financial accounts and participate in the financial system. This proposal would almost certainly undermine efforts to reach vulnerable populations and unbanked households. […] The American people feel strongly about their right to privacy and it is not reasonable to undermine their financial privacy without a clearly articulated purpose.'
CBA and ABA for months have warned of the negative consequences of this proposal - not only for banks but for the families and small businesses they serve - and earlier this year wrote a letter to the Senate Committee on Finance urging policymakers to oppose the proposal.
Click HERE to read the full letter sent to Capitol Hill today.
CBA - Consumer Bankers Association published this content on 17 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 September 2021 19:31:07 UTC.