Update as of October 20: Opposition is having an impact on the proposed legislation described below. The dollar threshold that would require reporting has risen from $600 annually to $10,000 annually and exemptions have been added for certain types of income, including payroll and Social Security income. Unfortunately, these revisions do not change the main reasons to continue opposing this proposal — the requirement would represent a significant infringement on individuals’ financial privacy and would become a complicated and costly compliance burden for all financial institutions, including your credit union. Please continue to voice your opposition using the Indiana Credit Union League form that remains current and active below.
Elements Financial and our credit union industry partners are closely monitoring a newly proposed tax provision that could pass as part of the $3.5 trillion “Build Back Better Act” reconciliation spending package. One measure under review for this legislation is the Treasury Department requiring financial institutions to report additional accountholder information in an enhanced annual IRS Form 1099-INT.
If considered, this proposal would require credit unions and banks to report the inflows and outflows of funds to accounts that hold more than $600. The administration hopes the IRS would be able to use the data to identify unreported taxable income. But it’s unclear how the IRS will achieve the intended goal while also keeping the sensitive information secure.
It's also uncertain how this proposal will increase the already high compliance burden on all financial institutions. It would fundamentally change the nature of the information depository institutions are required to report on their accountholders, creating new concerns regarding data security and privacy.
Credit unions do not support the new IRS reporting requirement. Employees at Elements are taking action to let our Senators and Representatives know that we oppose it. We encourage members to use their voices, as well, by contacting your members of Congress today, in opposition to this potential IRS reporting provision.
Use this ready-to-send form provided by the Indiana Credit Union League to convey this message to your lawmakers today.
