August 24, 2021

NAFCU urges CUs to join advocacy efforts against IRS reporting requirements ahead of House work on Budget Resolution


The House this week has returned from its August recess to consider the Senate-passed Fiscal Year (FY) 2022 Budget Resolution. Yesterday, the House Rules Committee met to attempt to set up a rule that would allow for adoption of the Budget Resolution. The Senate-passed resolution includes a burdensome tax reporting requirement for all financial institutions, including credit unions, to report all annual account inflow and outflow of personal and business accounts with an annual flow of $600 or more.  While the provision in the Budget Resolution does not have the force of law, it serves as a guide for future legislation, including a reconciliation package that Congress is expected to consider in September.

NAFCU has consistently urged House members to remove the provision since its inclusion in the Biden Administration’s FY 2022 budget proposal. In a letter to the House, Brad Thaler, NAFCU vice president of legislative affairs, characterized the provision as “a misguided proposal that stands to pose more harm and burdens on community institutions with uncertain returns.” The provision would also undermine the broad reporting responsibilities and raises privacy concerns for credit unions and their members. Senate Finance Committee Ranking Member Mike Crapo, R-Idaho, offered a NAFCU-backed amendment to block the provision but it was rejected by the Senate during that chamber’s consideration.

While NAFCU supports seeking more comprehensive solutions to tax compliance, the association is concerned that adding speculative reporting requirements would create complexity and confusion for both financial institutions and taxpayers.

Yesterday Thaler also encouraged credit unions to join the association in its advocacy to push back against legislative efforts that could harm the industry and weigh in on the burdensome tax reporting provision by using NAFCU’s Grassroots Action Center. Credit unions can also contact Thaler or members of NAFCU staff directly for assistance with outreach to members of Congress or questions on NAFCU's grassroots advocacy efforts.

NAFCU's Grassroots Action Center is a great resource for credit unions to easily contact lawmakers to share how their actions are impacting individual institutions, members, and communities – and submit a new message opposing the tax reporting requirements.

NAFCU will closely monitor the House vote on the Budget Resolution and advocate against provisions that would further complicate credit union compliance and reporting burdens. Access all NAFCU's advocacy, compliance, and education resources online, anytime.