CUs Gear Up for Renewed Fight in Senate Over IRS Reporting Requirements

Our fight over new IRS reporting requirements continues. While the U.S. House of Representatives recently passed the Build Back Better bill without the IRS reporting requirement, the fight in the U.S. Senate is growing more heated, led, in part, by one of Virginia's own - Sen. Mark Warner.

We will need your continued support on this! 

Press reports say Senate Democrats are considering narrowing reporting requirements to business-related income to sidestep consumer privacy concerns that doomed an earlier version, according to sources following behind-the-scenes discussions on Capitol Hill.

The industry had complained that the earlier plan was a privacy “dragnet." Now, the administration appears to be mulling a narrower focus on business income — an effort apparently led in the Senate by Sen. Mark Warner, D-Va., who sits on both the Finance and Banking committees.

• The financial services industry remains strongly opposed because they don't want consumers to view them as government spies.

• A narrower reporting regime might not necessarily be easier for financial institutions to comply with. As the government tries to narrow the particulars, there will be a greater potential for technicalities to trip up financial institutions, compliance experts say.

  “Reporting requirements with carve-outs and exemptions tend to be more complex to comply with, not less,” said Brian Lynch, president of the regulatory compliance and data analytics firm SteelEye. “Where rules aren’t black and white but need to be interpreted, firms often end up either doing too much or too little — resulting in increased risk.”

As reported in American Banker, sources familiar with the deliberations, who stress that talks are fluid, say that the White House and its political allies are also exploring ways that the program’s costs could be somehow subsidized for smaller financial institutions. The financial sector is unlikely to be swayed, even if that sweetener is included.