A Biden Administration tax plan proposal will ask banks to give information on the unreported income of their bank customers to U.S. Internal Revenue Service.
Two local bankers sent information to help the public understand the proposed requirements.
“Congress is expected to begin considering a new tax reporting requirement that would require banks to report information on account flows to the Internal Revenue Service,” according to a press release from Gregg Motley, Southeast Kansas Regional Manager of Landmark National Bank.
“Specifically, we would be required to report on all customers with gross inflows (credits) and outflows (debits) above $600 in an effort to crackdown on tax avoidance,” Motley said. “The proposal is concerning because it would likely increase tax preparation costs, particularly for our small business/sole proprietor customers, and could undermine public trust in banks. The proposal presents a significant reporting burden for the bank and customer privacy and data security challenge for our customers.”
It is still a proposal under consideration, and customers are encouraged to contact their congressman/congresswoman to share their concerns, according to the press release from Motley.
“The independent community bankers of America (ICBA) has put together the most information on this rule,” Bryan Holt, Union State Bank President said.
The following is a link to the organization’s website:
https://www.icba.org/bank-locally/consumer-alert-from-icba
Motley sent this link to help with understanding the issue:
The Federal government is relying upon the IT systems of banks to handle the volumonous information that will be collected and warehoused. As one might assume, the Federal government’s IT systems are outdated and insecure. One can expect more consolidation of smaller banks because of unnecessary increased costs. Rural America takes it on the chin again.