Financial institutions in the region are expressing concerns about a new measure that is under consideration in Congress. The Treasury Department’s proposal would require the IRS to report bank transactions from accounts with at least $ 600 in deposits or withdrawals. However, many lawmakers are urging to increase this limit to $ 10,000 and explore other exceptions like the exclusion of mortgage payments or payroll deposits. Under this proposal, banks would be required by law to report account information to the IRS, although they would not provide information on individual transactions.
The Treasury Department estimates the measure would help stop fraudsters and close the current tax gap, which the IRS has estimated at $ 166 billion between taxes owed by businesses and what is actually paid.
At a congressional hearing last month, Treasury Secretary Janet L. Yellen spoke about the estimated tax gap.
âI think it’s important to recognize that we have an estimated tax gap of $ 7 trillion over the next decade,â Yellen told the committee. “It is taxes that are owed and unpaid to government that rob us of the resources we need to make essential investments to make America more productive and competitive.”
Farmers and Merchants Bank President and CEO Stanley Tucker disagrees.
“If it was really about finding the tax gap for the highest incomes, the reporting threshold would be several hundred thousand, not $ 600, not $ 10,000,” Tucker told the Valley Times-News. Tucker encourages individuals to contact their local representatives and express their views on this proposal.
The bank issued a statement related to the Treasury Department’s proposal.
âThe Farmers and Merchants Bank is opposed to this proposal because it is definitely outdated by the government and constitutes an invasion of privacy. Farmers and Merchants Bank does not currently track this type of customer account information, âthe statement said. âThe bank should hire additional staff and / or buy software. The cost would be substantial, making small banks like us even less competitive with big banks. “
The Independent Community Bankers of America (ICBA) issued a statement opposing the proposal.
“IRS Disclosure Proposal is an invasion of consumer privacy, a violation of American due process, a data security risk in the ongoing investigation into leaked claims of agency revenue and a threat to bipartisan efforts to reduce the unbanked population by driving out more Americans. banking system and predatory lenders.
In a similar statement, Renasant Bank chief executive officer Mitch Waycaster said the financial institution also opposed the proposal.
“The administration’s proposal to require financial institutions to track and submit the vast majority of their bank customer information to the IRS risks major data breaches, breaches financial confidentiality and overloads.” the banking system of massive data collection responsibilities, all for a purpose that is obviously not served by the proposal, âWaycaster said. “This policy proposal also undermines the efforts of community bankers to reach the unbanked, who are often skeptical of working with federally regulated organizations.”
House Speaker Nancy Pelosi D-Calif said on Tuesday the threshold was negotiable but supported Biden’s proposal.