The IRS wants permission to snoop around your bank account. Don’t let it
Arizona credit unions are opposite to an element being considered part of the $ 3.5 trillion reconciliation bill. In fact, anyone with a bank or credit union account has good reason to be upset.
The bill may include a provision requiring financial institutions to report account transactions (deposits or withdrawals) from accounts that hold more than $ 600 to the IRS.
In Arizona, that would be an overwhelming majority of 1.6 million credit union members and millions more with bank accounts.
What does this mean for you, the consumer? An invasion of your privacy and potential additional taxes. This proposed fishing expedition is bad for consumers.
IRS says it wants this data to increase revenue
The proposal states that if your account balance is greater than $ 600 at any given time, your financial institution will be required to track your transactions and report them to the IRS using an enhanced Annual IRS Form 1099- INT.
While Form 1099-INT declares taxable activity, this new reporting requirement would not reflect any taxable activity. Instead, what the Biden administration hopes the IRS would be able to do is use this huge data entry to identify unreported taxable income.
But it’s unclear how the IRS will use this data to achieve its goal. In addition, the history of the federal government with regard to the security of this type of data is questionable to say the least.
It fundamentally changes the nature of the information your financial institution is required to report about you and requires your financial institution to provide information to the government that does not reflect taxable activity.
Both the Treasury Department and the IRS have said this is a method for them to generate income.
As Fox Business News recently reported, “The White House estimated that the policy, which would apply to bank, loan and investment accounts, could generate an estimated $ 463 billion in additional revenue over the next decade.
“The measure, if Congress approves it to fund Biden’s sweeping $ 3.5 trillion plan for family and climate change, would give the IRS a huge amount of new information it would have to learn how to manage and use.”
It’s a huge overshoot, especially for your privacy
The privacy of our members is just one of the many reasons we oppose this measure.
For financial institutions to comply with this requirement, significant regulatory burdens would also be added to their operations. This would likely require them to invest in updating software, adding and training staff on the new procedures, handling complaints about the obligation to provide this information to the government, and taking other action.
All of this will come at a cost to members and customers.
In addition, there is a potential for security breaches of consumer personal data. The IRS is one of many government systems that have recently suffered a data breach. Financial institutions are very concerned about the government’s ability to protect your data.
We ask that you contact your representative in Congress and tell them to oppose this measure.
Congress should not allow the IRS to gain access to your personal financial transactions in a blatant attempt to unnecessarily tax you.
It’s an epic overtaking. Make your voice heard. Your privacy and your money are at stake.
Scott Earl is President and CEO of the Mountain West Credit Union Association, which represents credit unions in Colorado, Wyoming and Arizona, which has 1.6 million credit union members. Reach it at [email protected]