Bank Reporting Requirements Still Could Make It Into Budget Bill So ACT NOW

Last week, the Capitol Hill newspaper Politico reported that lawmakers in Congress are still considering a provision that would require financial institutions to report to the Internal Revenue Service (IRS) on the deposits and withdrawals of all business and personal accounts, as well as transfers between accounts of the same owner.

Connecting the Dots previously reported on this idea, which is incredibly unpopular with the public.

According to Politico, U.S. House Ways and Means Chair Richard Neal (D-Mass.) has promised he will continue to discuss the idea with the Biden administration. Chair Neal is getting significant pressure from other quarters as well. U.S. Treasury Secretary Janet Yellen and Internal Revenue Service Commissioner Chuck Rettig both wrote to Rep. Neal last week in support of the proposal. Secretary Yellen said, “The objective of this reporting regime is to help the IRS pursue high-end noncompliance by providing some information about opaque income streams that disproportionately accrue to the top.”

Last week, MSCI joined the Independent Community Bankers of America (ICBA) and several other business trade associations to send a letter to House and Senate leaders expressing opposition to this idea. The letter, available here, said, “Indiscriminate, blanket data collection would amount to a troubling effort to profile American taxpayers based on account characteristics without grounds for suspicion of tax evasion. Such profiling is inappropriate in all law enforcement contexts.”

The ICBA, which represents small financial institutions around the United States, is asking small business owners to make their voices heard in opposition to the proposed IRS requirement. MSCI members are encouraged to use ICBA’s online tool to send a letter to their member of Congress.