NAFCU urges CUs to join advocacy efforts against IRS reporting requirements ahead of House work on Budget Resolution
The House this week has returned from its August recess to consider the Senate-passed Fiscal Year (FY) 2022 Budget Resolution. Yesterday, the House Rules Committee met to attempt to set up a rule that would allow for adoption of the Budget Resolution. The Senate-passed resolution includes a burdensome tax reporting requirement for all financial institutions, including credit unions, to report all annual account inflow and outflow of personal and business accounts with an annual flow of $600 or more. While the provision in the Budget Resolution does not have the force of law, it serves as a guide for future legislation, including a reconciliation package that Congress is expected to consider in September.
NAFCU has consistently urged House members to remove the provision since its inclusion in the Biden Administration’s FY 2022 budget proposal. In a letter to the House, Brad Thaler, NAFCU vice president of legislative affairs, characterized the provision as “a misguided proposal that stands to pose more harm and burdens on community institutions with uncertain returns.” The provision would also undermine the broad reporting responsibilities and raises privacy concerns for credit unions and their members. Senate Finance Committee Ranking Member Mike Crapo, R-Idaho, offered a NAFCU-backed amendment to block the provision but it was rejected by the Senate during that chamber’s consideration.
While NAFCU supports seeking more comprehensive solutions to tax compliance, the association is concerned that adding speculative reporting requirements would create complexity and confusion for both financial institutions and taxpayers.
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