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A group of Republican members of the US House of Representatives have raised concerns with Congressional leaders and officials in the Biden administration over a proposed Internal Revenue Service (IRS) data collection that would increase financial institution tax information reporting requirements.
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The proposal would require financial institutions to report to the IRS certain transaction-level data as well as information about outflows and inflows on accounts over $ 600 each year.
U.S. Representative Tom Emmer (R-MN) said the proposal’s requirements would impose significant compliance costs on banks, credit unions and associated financial institutions. He also said it would invade the privacy of millions of Americans.
“Our Main Street financial institutions are already required to report a huge amount of data to the IRS, and the IRS has proven time and time again that they cannot protect this sensitive taxpayer information. Privacy is one of the main reasons people choose not to open a bank account. This proposal will further exacerbate the divide between the banked, the unbanked and the underbanked, â€said Emmer.
Emmer was among more than 140 Republican members of Congress who sent a letter Sept. 13 to House Speaker Nancy Pelosi (D-CA), Ways and Means Committee chair, Rep. Richard Neal (D -MA), Treasury Secretary Janet Yellen, and IRS Commissioner Charles Rettig with their concerns.
“Not only are there serious privacy implications for taxpayers and compliance burdens for our financial institutions, there is also no reason to believe that passing more sensitive information to the IRS will help. in any way to close the “tax gap” – the difference between taxes paid and taxes owed by law. We should only legislate when it makes sense, and it should protect Americans and our financial system, not focus on raising revenue at the expense of our taxpayers and financial institutions, â€Emmer added.
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