October 18, 2021
The Biden Administration is proposing a sweeping expansion of tax information reporting which, if enacted, would require banks to report detailed information on the inflows and outflows of every customer account above $600 to the IRS. The administration’s stated goal is to reduce the tax gap and also raise revenue to help offset the cost of additional spending programs.
These new reporting requirements raise serious questions about Americans’ right to privacy and will raise the cost of tax preparation for individuals and small businesses. Banks are trusted to safeguard customers’ money and information, and we take that responsibility seriously. This proposal threatens that trust by forcing us to share account information with the IRS, which has repeatedly failed to protect the personal information of individual taxpayers in recent years. The IRS has not explained how it will store, protect and use this massive amount of personal financial information. The IRS concedes it cannot even process all of the reams of information it currently receives.
We strongly believe that all taxpayers should pay what they owe and that the IRS should vigorously enforce the law. However, this proposal does not target those suspected of cheating on their taxes; instead, it creates a dragnet of data collection for everyone with a financial account.
Forcing banks to report gross inflows and outflows of customers’ accounts—at any dollar threshold—is bad public policy and should be rejected. Not only does it put the security and confidentiality of taxpayers’ financial information at risk and raise serious privacy concerns, it presumes that all bank customers are cheating on their taxes when we know that is not the case.
Congress is expected to vote on this new proposal in the coming days. You can take action and fight this misguided proposal. Join with other taxpayers from across the country and contact your members of Congress today to let them know you oppose this proposal. You may contact your members of Congress using this link provided by the American Bankers Association.
G. Mike Odom, Jr.
President and CEO