Expanded IRS Reporting Could Lead to ‘Serious Negative Consequences’

NOTE: Your League is concerned about the compliance burden this IRS Reporting Requirements proposal represents for credit unions, the privacy issues it poses for our members and the security threat it represents for us all.

We urge you to reach out to your lawmakers today in opposition to this proposal. You can easily do so here.

Lawmakers must fully understand the additional compliance required by taxpayers and financial institutions under proposed new Internal Revenue Service reporting requirements, CUNA, NAFCU and more than 100 organizations wrote to Congressional leaders Thursday. The letter follows comments from House leadership earlier this week that the expanded reporting language would be included in the House’s upcoming infrastructure bill vote.

“We believe that this program is costly for all parties, not fit for purpose, and loaded with the potential for unintended and serious negative consequences,” the letter reads. “As associations representing a broad cross-section of financial and business interests, we urge you to oppose any efforts to institute this new reporting regime.”

The letter adds that the proposal brings with it significant privacy concerns, as previous cyber attacks have resulted in massive data breaches resulting in the theft of taxpayer information.

The letter also notes the “significant operational complexity” that would be added to financial institutions, even with proposed exceptions discussed in recent days.

“While recent proposals suggest that increasing the de minimis threshold to $10,000 is less objectionable, this is a flawed assumption and will not significantly reduce the scale of this new IRS program,” the letter reads.

The organizations also attached an additional document containing more information about the negative impacts on consumers and financial institutions.