If community bankers weren’t busy enough to continue their heroic economic response to the pandemic, a recent proposal included in Budget 2022 proposal to impose new IRS reporting warrants on customers’ bank accounts has become a major advocacy priority.
To counter the plan, community bankers and their clients should weigh directly with their members of Congress to voice their opposition.
The proposal would require financial institutions to report to the IRS on deposits and withdrawals from business and personal accounts. This proposal would be
• To constitute a broad and unjustified invasion of the privacy of all bank customers without reason to suspect tax evasion.
• Be intrusive and blind.
• Undermine the goal of reducing the number of unbanked people.
• Increase complexity and confusion for taxpayers.
• Inundate the IRS with personal financial data and increase the risk of a data breach.
Specifically, the FY2022 budget proposal would require banks and other financial institutions to report deposits and withdrawals from all business and personal accounts to the IRS, with a de minimis exception for accounts with outstanding balances. less than $ 600.
The American Banking Association (ABA), the Independent Community Bankers Association (ICBA) and many other consumer advocates have come out strongly including community banks.
New IRS bank account mining would be intrusive and indiscriminate for banks customers, undermine the goal of bringing unbanked Americans into the banking system, could increase complexity and confusion for taxpayers, enlist community banks as IRS agents while imposing new reporting burdens, expose banks to penalties for unintentional errors; and would funnel more information into the IRS than it can process. Instead of a fishing expedition that invades the privacy of bank customers and occupies resources that could otherwise be spent serving local communities, ICBA urges IRS to close the tax gap with the data that he already has.
According to an ICBA poll conducted by Morning Consult, two-thirds of voters (67%) oppose this proposal. Opposition to this IRS proposal is bipartisan and fierce, with more than half of voters (53%) strongly opposed and only 22% in favor.
“We encourage all of our clients to contact their Senators and Representatives to let them know that they do not want this proposal included in a bill,” said Dianna Lee, Head of Marketing and Public Relations for Troy Bank & Trust. “There are already regulations on reporting, let alone invasion of privacy. If this law is passed, we will be obliged to report every transaction entering or leaving an account, personal or commercial, if that account has a balance of more than $ 600.
Lee encourages account holders at all financial institutions to make their voices heard and let lawmakers know that there is strong opposition to this bill. To make your voice heard with policymakers or to learn more about this proposal, visit www.banklocally.org/privacy. We value your business and your privacy and want to make sure that you have all the information you need regarding your finances and your money.