Consumer alert: New IRS reporting mandate is a threat to privacy

Last updated on October 1st, 2021 at 09:08 am

As a local, independent bank, we stand up for what is right in our communities, and we also seek to inform the public about issues that can impact their financial well-being.

In May, a proposal surfaced in Washington that would impose new IRS reporting mandates on customer bank accounts. If passed, all banks and other financial institutions would be required to report account deposits and withdrawals to the IRS regardless of tax liability. This requirement would apply to all personal and business bank accounts with a balance of $600 or more.

This indiscriminate, comprehensive bank account reporting could soon be enacted in Congress and would create an unacceptable invasion of privacy for consumers and companies across the nation. Furthermore, the proposal could ultimately hurt small businesses by double-taxing their income.

Mandating new, broad account reporting would infringe on the privacy of bank customers, push more people away from a banking relationship by forcing banks to act as agents for the IRS, and overload the IRS with more personal information about American companies and citizens than it can possibly process or keep safe from a data hack.

The proposal has faced harsh criticism from financial industry trade organizations, consumer privacy advocates to business owners and the generic public. In fact, recent Independent Community Bankers of America (ICBA) polling conducted by Morning Consult found that 67 percent of voters oppose this proposal. 

We hope that by getting the word out about this misguided proposal, we can make our collective voices heard and stop it in its tracks.

The ICBA has created resources to educate Americans about the proposal and to help them express their opposition directly to their elected members of Congress. These resources can be found at www.banklocally.org/privacy.  We urge anyone who values their privacy to spread the word and speak up. 

People and businesses have trusted our bank, and many others like ours, for generations. That trust is largely built upon our acumen to do what is best for our customers. 

Being forced to broadly share virtually all of our customers’ account information would be contradictory to our core values, to say the least. We will do everything in our power to prevent this proposal from becoming reality, but we know we can’t do it alone.

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Jeff Standafer is president and CEO of Citizens Bank

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