IRS Reporting Requirement
Credit unions’ main priority is to meet the financial needs of consumers while maintaining their duty as a trustworthy financial institution. A new proposal is being floated in Congress that would impose burdensome reporting requirements for credit unions and cause data privacy concerns for their members. The provision would require financial institutions to report account inflow and outflow information of $10,000 or more to the IRS.
We strongly oppose the provision currently under consideration in the fiscal year 2022 Budget Resolution. While the intention of the proposal is to identify tax fraud, the efficacy of the requirement is still unclear. In addition, the proposal poses major privacy concerns for account holders. Credit unions already face a wide range of reporting responsibilities alongside regulatory compliance burdens. They don’t need to adhere to another difficult and speculative reporting requirement.
How This Impacts You
If this provision were to pass under the FY2022 Budget Reconciliation legislation, credit unions would be required to report annually the account inflow and outflow of all banking accounts with $10,000 or more to the IRS. Several compromises have been discussed in Congress, such as exempting large purchases from reporting, however, the scale of the program would essentially remain the same. If this provision is kept in the final legislation, credit unions would face significant reputational and operational challenges, as well as an increase in tax preparation costs for both individuals and small businesses. Not to mention, the provision jeopardizes the greatest concern for consumers: financial data privacy and security.
Urge Congress to Reject Proposed IRS Reporting Requirement.
Contact your member of Congress to express your concern against this radical reporting regime. Tell Congress to oppose this invasive provision through NAFCU's Grassroots Action Center