House Speaker Nancy Pelosi, D-Calif., on Tuesday endorsed a Biden Administration plan to require credit unions and banks to report data to the IRS from accounts that have “gross flow thresholds” over $600.
And while Pelosi said the $600 amount is negotiable, she told reporters at a news conference that she expects the provision to be included in budget reconciliation legislation as a way to pay for increases in spending on social programs
“There are concerns that some people have but if people are breaking the law and not paying their taxes, one way to track them is through the banking system,” she said. She added that she favors the $600 figure, but that it could be changed.
Biden Administration officials have said that the provision could raise $460 billion over ten years.
However, financial services trade groups have said that the plan would pose a huge regulatory burden and that it would be an invasion of customer privacy. And those trade groups have been encouraging consumers to call their members of Congress and register their objections to the proposal.
Following Pelosi’s news conference, Ryan Donovan, chief advocacy officer at the Credit Union National Association said that increasing the $600 threshold does not alleviate the concerns of the financial community. “The proposal at any threshold is fundamentally flawed and unnecessarily puts consumers and their data at risk,” Donovan said. “Credit union members across the country have led the call for Congress to abandon this idea, their concern is shared by Americans of every walk of life. We are disappointed that Congress continues to have this on the table.”
CUNA said that it has issued an action alert asking credit union employees to contact their members of Congress; they said so far, nearly 500,000 messages have been sent.
Officials from the National Association of Federally Insured Credit Unions also have been lobbying against the proposal. “We do not believe that our concerns can be addressed by the various compromises that have been floated and urge you to reject this provision outright,” Brad Thaler, NAFCU’s vice president of legislative affairs wrote in a letter to members of Congress last week.
He added, “while we support efforts to increase taxpayer compliance, we do not believe adding untested reporting requirements to an already heavily regulated industry is the answer.”