ABA Supports Amendment Blocking New Account Flow Reporting Requirements
ABA on Tuesday wrote to Senate leaders in support of an amendment to the budget resolution put forth by Sen. Mike Crapo (R-Idaho) that would prevent the Internal Revenue Service from establishing a new information reporting framework for individual or business bank accounts with flows of $600 or more. Such a framework was included as part of the Biden administration’s tax proposal earlier this year to help shrink the tax gap.
ABA emphasized that banks already report a considerable amount of information to the IRS and developing and executing the new reporting regime would be complex, time-consuming and could pose a threat to data privacy. “The proposed reporting system would apply across most, if not all, bank products—including many that do not currently require any IRS reporting and consequently do not have even the baseline analytical and reporting infrastructure needed to support this type of reporting,” ABA noted. “This would be a significant operational undertaking, especially for community banks that are often dependent on third-party service providers for their system updates.”
The amendment was narrowly defeated by a vote of 49 to 50. ABA will continue to oppose any attempts to enact this reporting framework in the days ahead. Read the letter.