Action Alert: IRS Reporting Requirements Proposal
Posted by Ben Shuey on September 1, 2021
The Biden Administration has recently proposed that financial institutions be required to report additional account holder information in an enhanced annual I.R.S. Form 1099-INT. This effort is intended to improve taxpayer compliance and increase federal revenues by $463 billion over the next ten years. Initially, this proposal was expected to be included in the bi-partisan infrastructure bill but was ultimately left out over opposition from Republicans. The issue looks to be taken up again through the forthcoming reconciliation process of the $3.5 trillion “human” infrastructure bill.
Discussions on this proposal have already taken pace in the House Ways and Means Committee and the Senate Finance Committee. In fact, Senator Mike Crapo (R-ID) attempted to block these reporting requirements in the Senate Budget Resolution but came up one vote short.
Among the concerns for credit unions are the cost and effort associated with compliance with these measures and the significant amount of information that would be requested. The de mimimus exemption for reporting this data of $600 would mean that a majority of credit union account holders data would be required. This would have an especially burdensome impact on smaller credit unions that would need to make software upgrades and increase compliance costs to provide this data. Another concern is credit union members data privacy. Given recent breaches of federal agency data and leaks of IRS data, we are not confident that instituting this massive data reporting would protect member’s data privacy.
We are asking member’s to join with our national partners at CUNA by participating in this Call To Action.