Blog: CUNA supporting further exploration of tax reporting proposal – Financial Regulation News – Financial Regulation News

The Credit Union National Association (CUNA) is joining a group of organizations in supporting further exploration of the legislative tax reporting proposal concerning costs and benefits assessments.

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President Joe Biden’s FY22 budget proposal includes language requiring financial institutions to report information on account flows.

The CUNA has partnered with organizations to forward correspondence to Congress, seeking further evaluation of the potential for imposing a new level of data collection to the tax reporting structure.

“This proposal will have real costs, not only for government, but also for financial institutions, small businesses, and individual taxpayers,” the organizations wrote. “Strengthening IRS funding and overhauling outdated technology to use existing information reporting to facilitate targeted auditing of questionable tax returns is a much more efficient and effective approach to closing the tax gap.”

Other key observations within the correspondence, per authorities, include new reporting would appear to require material development costs and process additions for financial institutions; estimates used to derive the expected benefits from the proposal may be outdated and misleading; the proposal scope will have significant privacy and data protection ramifications; and the position that providing enhanced resources for IRS audits is a more effective and fair approach.

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