Untargeted Data Reporting Raises Concerns Over Privacy, Security, Impact on Unbanked
Washington, D.C. (July 28, 2021) — The Independent Community Bankers of America (ICBA) and a broad coalition of business groups today expressed strong opposition to a Treasury Department proposal that would require financial institutions to report information on customer bank accounts to the IRS.
In a joint letter to congressional leaders, the coalition objected to the broad, untargeted nature of the proposal, which would require 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.
“The Treasury Department’s proposal to mandate blanket financial account reporting to the IRS would intrude on consumer privacy, create data security risks to taxpayers, undermine efforts to reduce the unbanked population, and create taxpayer complexity and confusion,” ICBA President and CEO Rebeca Romero Rainey said today. “Community bankers and other small businesses urge Congress to reject the Treasury proposal and explore less intrusive means of reducing the tax gap.”
In their letter, the groups said:
- The IRS has a poor record of data security, which would compromise taxpayers’ privacy and raise their risk of identity theft.
- Intrusive account reporting to the IRS would undermine the important policy goal of reducing the unbanked population among communities prone to distrust of institutions and government agencies.
- The Treasury proposal would create taxpayer complexity and confusion—undermining the goal of tax simplicity to promote compliance.
The joint letter was signed by:
- AICC, The Independent Packaging Association
- American Lighting Association
- American Supply Association
- Community Development Bankers Association
- Construction Industry Round Table
- Consumer Bankers Association
- Credit Union National Association
- Energy Marketers of America
- Foodservice Consultants Society International, The Americas Division
- Foodservice Equipment Distributors Association
- Global Cold Chain Alliance
- Heating, Air-conditioning, & Refrigeration Distributors International
- Independent Community Bankers of America
- Independent Electrical Contractors
- International Franchise Association
- Main Street Employers Coalition
- Metals Service Center Institute
- Mid-Sized Bank Coalition of America
- Mortgage Bankers Association
- National Association of Federally-Insured Credit Unions
- National Association of the Remodeling Industry
- National Association of Wholesaler-Distributors
- National Community Pharmacists Association
- National Electrical Contractors Association
- National Electrical Manufacturers Representatives Association
- National Federation of Independent Business (NFIB)
- National RV Dealers Association
- National Small Business Association
- Pet Industry Distributors Association
- Petroleum Equipment Institute
- Promotional Products Association International
- S Corporation Association
- Saturation Mailers Coalition
- Secondary Materials and Recycled Textiles Association
- Small Business & Entrepreneurship Council
- Small Business Council of America
- Specialty Equipment Market Association
- Subchapter S Bank Association
- Textile Care Allied Trades Association
- The Small Business Legislative Council
- U.S. Chamber of Commerce
- United Veterinary Services Association
The letter follows a separate joint letter to Congress from ICBA’s Minority Bank Advisory Council expressing concerns with the plan. More information is available in a recent ICBA fact sheet on the proposal.
About ICBA
The Independent Community Bankers of America creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, over $4.4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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