WASHINGTON—Ahead of a House Ways and Means subcommittee hearing to examine the 'tax gap,' NAFCU and CUNA joined with several other financial services industry trades to flag their concerns with a possible new tax reporting requirement included under President Joe Biden's budget proposal.
Under the new reporting requirements, financial institutions would be required to file an annual information return for all business and personal accounts with more than $600 in their account. The annual reporting requirement would include information related to gross inflows and outflows, including the amount of cash, transfers to and from accounts held by the same owner, and transactions with foreign accounts.
In the letter, NAFCU, CUNA and the trades said proposals "to create new reporting requirements for financial institutions appear to impose cost and complexity that are not justified by the potential, and highly uncertain, benefits."
Increased Complexity
The group noted the myriad of reporting financial institutions already provide, and noted that new requirements would likely increase costs and complexity of compliance.
The groups encouraged the subcommittee to carefully assess the costs and benefits of imposing a "new level of bureaucracy and personal data collection" on financial institutions' already "over-complicated tax reporting structure."