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Stop Proposal to Allow IRS Easy Access to Your Accounts

A new IRS proposal could affect your accounts and how your credit union operates.

As Congress considers new infrastructure spending, lawmakers are exploring unconventional sources of revenue to fund plans. One proposal effects Willis-Knighton Federal Credit Union and our members. The original proposal required that your credit union (along with other financial institutions and popular apps like Venmo and PayPal) report to the Internal Revenue Service (IRS) how much money has gone into and out of all accounts with more than $600 in them.

As of October 20, 2021, the proposed amount was raised to $10,000. The Treasury Department said the proposal would exclude “wage and salary earners and federal-program beneficiaries, such that only those accruing other forms of income in unclear ways are a part of the reporting regime.”

IRS Could Compare the Cash That Came Through Your Account With How Much Was Reported

The proposal is designed to close the tax gap. The financial reports would allow the IRS to compare how much cash came through a person’s accounts to how much was reported each year on income tax forms. That can include cash not reported by those who don’t list all their tips, people doing gig work for cash, side jobs paid in cash, people who sell crafts or products from home. This possible unprecedented access to your finances violates your personal privacy by forcing credit unions and banks to provide the government with information that does not reflect taxable activity.

The Louisiana Credit Union Movement’s Response

Credit unions strongly object to this proposal and have submitted thousands of messages to congressional leaders. The messages highlight that the new IRS bank account mining would:

  • Be intrusive and indiscriminate for our members
  • Increase taxpayer complexity and confusion.
  • Enlist credit unions as agents of the IRS while imposing new reporting burdens.
  • Expose credit unions to penalties for inadvertent errors.
  • Channel more information into the IRS than it can process

What can you do?

At https://www.cuna.org/advocacy/actions/grassroot-action-center.html?vvsrc=%2fcampaigns%2f87852%2frespond, credit union members can send a customizable message to their U.S. Representative expressing concern with the proposal and urging opposition.

The Louisiana credit union movement will continue speaking out against this threat to consumer privacy and credit union operations. Know that we will not simply hand over personal information at any time without it being required by law.

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