Trades Want Treasury to Back Off 'Burdensome' New Accounting Proposal
The proposal could require credit unions to report gross inflows and outflows of all accounts.
Concerned about personal data collection, unreasonably burdensome reporting requirements and a poor record of data security by the IRS, numerous trade organizations jointly sent a letter to lawmakers to oppose a proposal by the Treasury Department that would require financial institutions to report gross inflows and outflows of all business and personal accounts.
CUNA, NAFCU and nearly 40 other organizations sent a letter on Wednesday asking congressional leaders for help with this new proposal by Treasury.
“We object to the broad, untargeted nature of the Treasury proposal. Collection of comprehensive financial account data to determine tax liability must be narrowly targeted,” the letter stated. “Treasury’s indiscriminate, blanket data collection would be unsupported by any reasonable suspicion of tax evasion.”
According to the details of the proposal, it would require financial institutions to report the inflows and outflows of personal and business accounts, as well as transfers between accounts of the same owner, if it is more than $600 per year.
The letter argued that use of personal financial data must be rigorously justified by the Treasury Department and the IRS. “Moreover, we are concerned about the IRS’s poor record of data security, which exposes taxpayers’ data, compromises their privacy and makes them vulnerable to identity theft. In today’s environment, privacy and enhanced security of taxpayer data should take precedence over the mass collection of new data.”
“Further, we fear that new, intrusive account reporting would undermine the important policy goal of reducing the unbanked population,” it said, adding, “Indiscriminate sharing of financial account data with the IRS will only increase the challenge of reducing the unbanked population.”
NAFCU and CUNA have both indicated that their organizations will continue monitoring the progress of discussions surrounding the proposal and advocate against any new regulatory burdens it may have on credit unions.