WASHINGTON—The Senate has rejected, by a 49-50 vote, an amendment from Senate Finance Committee Ranking Member Mike Crapo (R-ID) that would have blocked the tax reporting requirement on financial institutions included in the Senate's fiscal year 2022 Budget Resolution.
The budget resolution includes the Biden Administration's proposal requiring financial institutions to report to the IRS on the annual inflows and outflows over $600 of all business and personal accounts, as well as transfers between accounts of the same owner.
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to Crapo to thank him for introducing the amendment and reiterate the association's support for the removal of the reporting requirement.
"We agree that requiring credit unions and other financial institutions to report on gross inflows and outflows for all accounts above $600 is a misguided proposal that stands to pose more harm and burdens on community institutions with uncertain returns," wrote Thaler. "Such a reporting requirement also raises privacy concerns for credit unions and their members.
‘Untested Reporting’
"While we support efforts increase taxpayer compliance, we do not believe adding untested reporting requirements to an already heavily regulated industry is the answer," added Thaler.
The Senate did adopt an amendment from Senate Finance Committee Chairman Ron Wyden (D-OR) that would change the specific $600 threshold to "large" amounts; however, the amendment gives the IRS and Treasury Department the authority to determine what the "large" threshold amount to establish the reporting requirement is, NAFCU noted.
CUNA Input
Before the vote, CUNA also wrote to Crapo in support of the amendment, stating, “Banks, credit unions, and other entities would be required to annually report to the IRS the gross inflows and outflows of account holders (businesses and individuals) with a breakdown for cash, transactions with a foreign account, and transfers to and from another account with the same owner. CUNA remains concerned about the effect this proposed new requirement will have on credit unions.”