Financial information

Axne urges House leaders to remove IRS statement proposal from Build Back Better Act

Today, Representative Cindy Axne (IA-03) and twenty other House Democrats called for the removal of a proposed tax information reporting rule from the Build Back Better Act, raising concerns over lack of details on the confidentiality and scope of the current measure.

The proposal would require that information on the gross annual inflows and outflows of all types of financial accounts in the United States (e.g., savings accounts, checking accounts, loans, investments) be submitted to the Internal Revenue Service (IRS ) every year.

“While the intent of this proposal is to ensure that all taxpayers meet their obligations – a goal we strongly share – the data that would be sent to the IRS is too broad and raises significant privacy concerns.” , he added. the members wrote. “We have little information on how the IRS plans to protect or use this huge mine of data. Americans expect their bank or credit union to protect their financial information. “

The Axne representative had previously raised concerns to House leadership and colleagues on an earlier version of this proposal.

“While I certainly think we need to look for ways to crack down on wealthy tax evaders, I oppose the implementation of anything that might collect information on middle-class families in Iowa and create massive amounts of paperwork for our small community banks and lenders., “ said representative Axne. “We have to make sure the richest 1% pay their taxes, but this proposal goes too far.”

The full letter, which was sent to President Nancy Pelosi and House Ways and Means President Richard Neal, can be viewed here and below.

Dear President Pelosi and President Neal:

We are writing to you today to express our concern about the new tax reporting regime proposed by the Department of the Treasury under consideration for inclusion in the reconciliation package. This proposal would require that information on the gross annual inflows and outflows of all types of financial accounts in the United States (e.g., savings accounts, checking accounts, loans, investments) be submitted to the Internal Revenue Service (IRS ) every year. We respectfully request that this proposal be withdrawn from further consideration in favor of a more focused approach.

While the intent of this proposal is to ensure that all taxpayers meet their obligations – a goal we strongly share – the data that would be transmitted to the IRS is too broad and raises significant privacy concerns. We have little information on how the IRS plans to protect or use this huge mine of data. Americans expect their bank or credit union to protect their financial information. This proposal would erode confidence in financial service providers.

Over the past few weeks, hundreds of thousands of voters have contacted our offices to voice their concerns and opposition to allowing the IRS to collect this data. We also heard from a wide range of businesses and small businesses about the significant burden and potential unintended consequences that could result from the new reporting regime.

Indeed, presumably on the basis of these important comments, the Treasury and other policymakers have proposed changes to the proposal, including increasing the de minimis level for reporting to $ 10,000 and providing for certain payroll exclusions and recipients of the federal program. We continue to hear from constituents that while these changes reduce the level of reporting somewhat, a significant number of taxpayers will continue to meet the reporting criteria. Most of these taxpayers are not the wealthy tax evaders who are the stated targets of this proposal.

A change of this magnitude deserves careful consideration by Congress and relevant stakeholders. The Treasury Department first included this idea in the Green Paper, which was released in May 2021, and we have yet to see any legislation outlining the specific contours of this policy. Given the privacy concerns this raises in addition to the significant burden that would be placed on a wide range of businesses and financial institutions, we respectfully request that this proposal not be included in the Build Back Better package.


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