Submitted
Young
U.S. Senator Todd Young (R-Ind.), and all Republican members on the Senate finance and banking committees, have sent a letter urging Senate Majority Leader Chuck Schumer (D-N.Y.) to abandon the Biden-Harris administration’s unprecedented proposal to expand the reporting of the private, confidential financial data of law-abiding Americans from financial institutions to the Internal Revenue Service (IRS).
The administration’s proposal would force financial institutions to report customer information such as gross inflow and outflow information and transaction information directly to the IRS for any account with at least $600 of activity annually.
“This proposal represents a radical departure from existing reporting requirements associated with national security and actual taxable events,” the Senators wrote. “Placing more requirements on financial institutions would not only adversely affect these institutions and their customers – who ultimately pay the price for compliance costs – but it would also inundate the IRS with layers of new paperwork and taxpayer data that is either redundant or irrelevant to improving federal tax compliance, as account inflows and outflows are not taxable events. Simply flooding the IRS with more data and burdening taxpayers, financial institutions, and already overwhelmed IRS service centers with more paperwork is of questionable value, especially when the IRS does not effectively use data already in its possession.”
Senator Young was joined by Senators John Thune (R-S.D.), Mike Crapo (R-Idaho), Pat Toomey (R-Pa.), John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), John Boozman (R-Ark.), Richard Burr (R-N.C.), Bill Cassidy (R-La.), John Cornyn (R-Texas), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Chuck Grassley (R-Iowa), Bill Hagerty (R-Tenn.), John Hoeven (R- N.D.), John Kennedy (R-La.), James Lankford (R-Okla.), Cynthia Lummis (R-Wyo.), Jerry Moran (R-Kan.), Rob Portman (R-Ohio), Michael Rounds (R-S.D.), Ben Sasse (R-Neb.), Tim Scott (R-S.C.), Richard Shelby (R-Ala.), and Thom Tillis (R-N.C.).
Click here to read the full text of the letter.
What they’re saying
“We are thankful for Senator Young’s strong opposition to the proposed invasive IRS reporting requirements,” said John McKenzie, President of Indiana Credit Union League in Indianapolis. “We are concerned about the enormous regulatory burden and cost this would place on credit unions, but more than that we believe that this program would be a severe invasion of the financial privacy of Indiana’s 2.7 million credit union members.”
“Our members trust us to protect their financial privacy,” said David Abernathy, President & CEO of Via Credit Union in Marion, Ind. “The push to require us to share a much deeper level of their confidential, private financial information with the IRS would jeopardize that trust and put their information at risk. We appreciate Senator Young’s efforts to stop these requirements from becoming law.”
“The Indiana banking community agrees with the insights expressed by Sen. Young and colleagues in their letter,” said Amber R. Van Til, President & CEO of the Indiana Bankers Association in Indianapolis. “If banks and other financial institutions are forced to report their customers’ account information to the IRS, the result would be a disastrous breach of consumer privacy, an erosion of trust in financial institutions, and a serious compromise to the safety of private customer information. Additionally, it would add excessive and needless administrative expense to the business of banking. As the letter aptly summarized, ‘It is a misguided and privacy-invasive proposal.’”
“An ICBA poll conducted by Morning Consult found 67% of voters oppose requiring financial institutions to report customer account information to the IRS, while consumers are speaking with more than 400,000 messages to their members Congress in opposition,” said Rebeca Romero Rainey, President & CEO of the Independent Community Bankers of America. “The IRS reporting proposal is an invasion of consumers’ privacy, a violation of Americans’ due process, a data security risk amid the agency’s ongoing tax return leak investigation, and a threat to bipartisan efforts to reduce the unbanked population by driving more Americans out of the banking system and toward predatory lenders.”
“This proposal is deeply concerning for America’s credit unions and their 120 million members,” said Jim Nussle, President & CEO of the Credit Union National Association. “Not only would the regulatory burden create an outsized impact on credit unions serving rural communities, but it raises serious privacy concerns for every consumer in the country. From the massive 2014 data breach at the Office of Personnel Management to this year’s IRS leak of federal tax returns, the federal government’s checkered history of warehousing personal data underscores the dangerous impracticality of this policy proposal.”