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NAFCU President and CEO Dan Berger last Friday published a CUInsight op-ed articulating major concerns around the proposed IRS reporting requirement which would require financial institutions like credit unions to send savings and checking account information to the IRS for accounts that exceed the $10,000 or more in deposits or withdrawals annually. 

The White House recently released a reconciliation framework which excluded this provision, a promising outcome from NAFCU and credit union efforts urging Congress to withdraw the reporting requirement. Still, Berger notes that, “many remain vigilant and hopeful that this provision be withdrawn from consideration in the final bill text altogether.”

Berger expressed that while the Administration introduced the provision as a way to close the tax gap, the broad nature of the reporting regime, which has been denounced by most Americans, would be an unwarranted intrusion into taxpayer’s financial privacy. 

“Almost every American would be subject to this invasive reporting when factoring in general spending over a course of a year at the current threshold,” wrote Berger. 

Reiterating that the IRS is not immune from data breaches, Berger pointed out that, “giving the IRS more data on the financial accounts of millions of Americans will only put their information at risk for leaks.”

Additionally, Berger voiced other hardships associated with the provision including compliance burdens for taxpayers and their financial institutions, as increased operation complexity, as well as the lack of proven efficacy of the program. 

“A wide range of organizations nationwide are calling on Congress to reject this provision, and calling on the Biden Administration to withdraw the proposal,” stated Berger. More Members of Congress from both sides of the aisle are joining the wave of opposition against the reporting regime including Senator Tim Scott, R-S.C. and Representative Drew Ferguson, R-Ga., who introduced the Prohibiting IRS Financial Surveillance Act which would block the IRS reporting requirement. Democratic leaders including Senator Joe Manchin, D-W.Va., and Representatives Charlie Crist, D-FL, and Abigail Spanberger, D.Va., have also expressed major concerns around the provision. 

NAFCU’s advocacy efforts against this provision have been steadfast since its first inclusion in the Administration’s fiscal year 2022 budget resolution. The association encourages credit unions to get involved and voice their opposition against this reporting regime. Read Berger’s full piece in CUInsight here.