Consumer Alert

 

Washington has proposed new bank reporting of all personal and business accounts to the Internal Revenue Service (IRS).

 

Specifically, the proposed fiscal 2022 budget would require banks and other financial institutions to report to the IRS on the deposits and withdrawals of all business and personal accounts with a balance of more than $600. 

 

To counter the plan, local bankers and consumers – especially small business owners -  should weigh in directly with their members of Congress to voice their opposition to this intrusive mandate. 

 

The IRS proposal would require financial institutions to report information on customer bank accounts to the IRS. This would be an enormous burden on the community banks required to furnish this information and a breach of our customers’ privacy.  Our clients are our primary focus, not serving as IRS agents to collect more information and potential tax revenue.

 

Community bankers are communicating several challenges to the proposal. The IRS Bank account mining would:

  • Be intrusive and indiscriminate for bank customers. 
  • Undermine the goal of bringing unbanked Americans into the banking system and possibly drive some accounts out.
  • Increase taxpayer complexity and confusion. 
  • Enlist community banks as agents of the IRS while imposing new reporting burdens. 
  • Expose banks to penalties for inadvertent errors. 
  • Channel more information into the IRS than it can process. They already receive significant reporting on large and suspicious transactions, along with interest earned and paid date.

 

We strongly urge local business owners and consumers to learn more by going to  banklocally.org/privacy and take action to prevent your bank from reporting all transactions in your accounts to the IRS.