NAFCU continues fight to get Congress to reject IRS reporting requirement for financial institutions
NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter to leaders of the House Ways and Means Committee and Senate Finance Committee highlighting NAFCU’s continued opposition to including new IRS reporting requirements for financial institutions in the Build Back Better Act (BBBA) and noting that potential compromises being floated do not address credit union concerns. The proposed new reporting requirement would require financial institutions to submit information to the IRS for all accounts with over $600 in inflow or outflow transactions on an annual basis. NAFCU has previously opposed this provision as Congress considered the fiscal year 2022 Budget Resolution.
“We strongly urge you to not include any language enacting this provision in the BBBA,” Thaler wrote. “We believe that requiring credit unions and other financial institutions to report on gross inflows and outflows stands to pose more costs and burdens on community institutions with uncertain returns.”
In addition, Thaler addressed how various compromises that Congress has floated do not address the real problems with the reporting requirements. These changes being considered include raising the reporting threshold from the proposed $600 amount to a higher level such as $10,000 or not counting direct deposits of paychecks.
“Because this provision focuses on the new reporting concept of account flows, and not income, most Americans would be caught up in this new scheme even at a higher threshold,” mentioned Thaler. “Furthermore, additional parameters will create additional compliance hurdles for financial institutions to report the correct account information. This provision cannot be fixed and should be rejected.”
Thaler addressed the wide range of reporting responsibilities and regulatory compliance burdens that credit unions already face. Additionally, he raised the privacy concerns that come with these requirements for the nation’s 127 million credit union members.
“In the meantime, we urge you to not include this troublesome provision, at any threshold or with any parameters, in the Build Back Better Act and reject its inclusion in any future legislative effort,” concluded Thaler.
The association remains alert on this issue to ensure its exclusion from the BBBA and will continue to advocate against provisions that would further complicate credit union compliance. Stay tuned to NAFCU Today for the latest on the legislation as it moves through Congress. In addition, NAFCU has urged members to urge Congress to oppose the requirements in a grassroots campaign.
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