Banking Groups Ask US House to Kill Proposed Account Reporting

U.S. banking lobby groups want to nix a proposal for bank account reporting that’s part of the congressional reconciliation package.

The groups, in a letter to Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, said the proposal could make for “reputational” challenges for large financial services firms.

It could also boost the cost of tax preparations for Americans and make for financial privacy issues. The groups urged members “to oppose any efforts to advance this ill-advised new reporting regime” in the letter.

“While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population,” the groups said.

The new proposal could make it so financial services companies have to keep track of inflows and outflows of any bank account above the minimum threshold of $600 during a year to the IRS. The number will include breakdowns for cash.

The proposal has attracted critiques for its potential to invade privacy. This, according to the lobbyists, could make it so that people are less willing to participate in the financial services system. It could undermine efforts to add more vulnerable or unbanked populations to the banking system.

The proposal is in the $3.5 trillion House package for reconciliation. The banking industry is against the tax reporting changes Democrats are pushing.

Another recent proposed rule by the U.S. involves the House’s new proposal to make it so that the cryptocurrency is subject to an anti-abuse rule, making it so investors aren’t allowed to reap tax benefits from losing investments and then, right after, buy back the same assets right after.

PYMNTS notes that the IRS still looks at crypto as a property instead of a security, allowing that asset class to escape older rules.

See more: House Bill Would Impose 'Wash Sale' Securities Rule on Crypto