Notification to our Customers Regarding the Tax Reporting Proposal
on Wednesday, October 27, 2021
10.27.21: Update on IRS Reporting Proposal
Your financial privacy is our priority which is why we are reaching out to share this important information with you. As you may have heard, early this fall there was a tax reporting proposal by our Federal Government that may impact our customers. We wanted to share the latest details regarding the recent tax reporting proposal.
The proposal centers around a sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs in the American Family Plan. The proposal, if enacted, would require banks to report to the IRS detailed information on the inflows and outflows of every customer account.
The initial proposal would have applied to any account with at least $600 in total annual cash flows, but that has now been narrowed in response to opposition by The American Bankers Association (ABA) and others. The proposal was revised and would require financial institutions to report information on gross inflows and outflows for all accounts above a revised $10,000 de minimis threshold with certain carve-outs – though no details were provided on how flow calculations would work.
The purpose of requiring this type of reporting suggests it would be used to narrow the “tax gap.” It is reported that the IRS could look for discrepancies between a taxpayer’s total bank deposits and withdrawals and their reported income.
Northwest Bank opposes this reporting proposal. This proposal raises the cost of tax preparation for small businesses but more importantly it raises serious questions about our customers’ right to privacy.
We will continue to voice our opposition to our local congress and encourage to you to contact Congress too. Make your voice heard and tell your federal lawmakers how their decisions will affect you and your community by clicking here to oppose The New IRS Reporting Requirements.
We thank you for choosing Northwest Bank. We will continue to keep you informed of any updates regarding the IRS Reporting Proposal.
Your privacy is important to us, and we want to inform you about a tax reporting proposal by our Federal Government that may impact our customers.
The Government is proposing a sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs in the American Families Plan. The proposal, if enacted, would require banks to report to the IRS detailed information on the inflows and outflows of every customer account.
These new reporting requirements will create unnecessary and expensive burdens for banks and raise the cost of tax preparation for small businesses, but more importantly they raise serious questions about our customers’ right to privacy.
Congress is poised to vote on inclusion of this proposal in the budget reconciliation package in the next few days.
To learn more about this proposal or voice your concerns to your local lawmakers visit Contact Congress Now: Opposed New IRS Reporting Requirements, provided by the American Bankers Association.
Thank you for banking with Northwest Bank. We are committed to you and your financial privacy.