United States Capitol Building, Washington D.C. (Source: Shutterstock)
Sen. Tim Scott (R-S.C.) introduced the "Prohibiting IRS Financial Surveillance Act" on Thursday to bar the implementation of "increased financial institution reporting to the Internal Revenue Service." It's a move fully supported by both CUNA, NAFCU and 47 Republican Senators in an attempt to stop the proposed IRS reporting requirement included in the budget reconciliation bill currently being negotiated.
Initially, the IRS reporting requirement would have credit unions and banks reporting all inflows and outflows of personal and business accounts of more than $600. On Tuesday, an updated proposal put that threshold at $10,000.
Both credit union trade organizations sent letters to Sen. Scott to show their support of his bill, at the same time condemned the current IRS proposed requirements.
"CUNA strongly supports your legislation, the Prohibiting IRS Financial Surveillance Act, to accomplish this important goal," CUNA President/CEO Jim Nussle wrote.
"Like you, we remain concerned that the Congress will legislate burdensome new tax reporting requirements on financial institutions. A proposal by the Treasury Department to require all financial institutions, including small and large credit unions, to report additional account holder information to the Internal Revenue Service in a much larger and more intrusive annual I.R.S. Form 1099-INT for virtually every member and customer," Nussle stated.
In a statement, NAFCU SVP of Government Affairs Greg Mesack said, "NAFCU commends Senator Tim Scott's introduction of the Prohibiting IRS Financial Surveillance Act that will protect consumers from invasive IRS surveillance of their financial data. Americans have made it clearly known that they do not want the IRS obtaining data on their spending and deposits. NAFCU stands ready in support of Sen. Scott's bill and will do what we can to ensure this critical legislation is passed."
CUNA and NAFCU made it clear in their letters to Sen. Scott that they are not opposed to strengthening taxpayer compliance efforts, but the proposal from the U.S. Treasury seems to be ill advised.
"While we support efforts to increase taxpayer compliance, we do not believe adding untested reporting requirements to an already heavily regulated industry is the answer. Instead, we would encourage Congress and the Administration to seek better solutions for taxpayer compliance, such as increased funding and support for IRS improvements. We remain committed to working with you in that effort," wrote NAFCU Vice President of Legislative Affairs Brad Thaler.
Both trade organizations launched a grassroots campaign for members to voice their opposition to Congress the proposal. So far, according to CUNA, they've had more than 60,000 letters sent from their Grassroots Action Center.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
