As negotiations around the $3.5 trillion infrastructure package heat up, the White House has proposed a new IRS reporting provision that requires financial institutions to report additional detailed account holder information. Specifically, language remains in place that would require credit unions and other financial institutions to report to the IRS all business and personal account deposits and withdrawals with a balance of more than $600. It should be noted that the $600 minimums exemption is deliberately set so low in order to require financial information from nearly every account held in American depository institutions.

Citizens Federal Credit Union does not support this additional reporting requirement. This would dramatically increase the regulatory burden for credit unions, undermine the privacy of consumers, and trigger significant data security concerns.

All financial institutions currently report to the IRS information related to actual taxable events for members and customers, interest earned or mortgage interest paid, for example. This new proposal would result in banks and credit unions turning over to the IRS sensitive account details that do not constitute taxable events. This would leave the IRS with a massive trove of personal financial data that would be used in a manner that is not detailed in the proposal and leaves the data vulnerable to a cyber-attack.

August 11 Update: Bid to strike IRS reporting requirement for FIs from Senate budget resolution falls short

Citizens Federal Credit Union is an active member of NAFCU and CUNA.