On Tuesday, Senate Democrats distributed an update on the controversial IRS reporting requirements that the credit union industry has strongly opposed since its unveiling in late June.
According to the updated proposal rolled out on Tuesday, it would require financial institutions to report inflows and outflows of personal and business accounts, as well as transfers between accounts of the same owner, if they are greater than $ 10,000 per year. The proposal that was floating for the past four months had a threshold of $ 600 per year.
The requirements do not apply to wage deposits for wages or to those receiving Social Security benefits.
Responding to the updated IRS report proposal, NAFCU Chairman / CEO Dan Berger said, “It has become very clear that Americans are opposed to the IRS getting information. additional on their financial accounts. The updated plan is nothing more than a facade in an attempt to build support for a flawed proposal. Instead of creating financial privacy risks for consumers and adding compliance costs for our nation’s community financial institutions, the Treasury and IRS should focus their attention on the data they already have to increase compliance. fiscal.
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Several dozen credit unions, banks and consumer groups have expressed their opposition to such a move by the IRS. At some point last month, it emerged that the proposal had died during negotiations with members of the House Ways and Means Committee. However, it was quickly revived in the full version of the budget reconciliation bill.
On Monday, NAFCU released a new video explaining the potential ramifications of the proposal for credit unions. In the video, featuring NAFCU Associate Director of Communications Amanda Dela Cruz, she said, “This dramatic change will force the IRS to collect and analyze your financial transactions. Most Americans would find themselves subject to this new declaration, even at higher thresholds, such as $ 10,000. “
Cruz continued, “This new reporting requirement would create new compliance burdens for credit unions and data privacy concerns for consumers. You can help stop this proposition before it’s too late.
According to the IRS and the Biden administration, this proposal would not allow tracking or analysis of individual transactions, as credit unions and bank lobbying organizations claim.
CUNA and NAFCU said they would continue to push back on this proposal throughout the budget reconciliation process.
CU time will continue to update this story with feedback from other credit union officials as we have them.