Independent Banker - September 2021 - 41

accompanying " Green Book, " the
Treasury's proposal would cover the
accounts of nearly all Americans
in an eff ort to combat tax evasion
and increase tax revenues by an
unreasonably optimistic $463 billion
over a period of 10 years.
While ICBA supports eff orts to
curb tax evasion, this proposal is not
the way to do it. ICBA and its allies
see many fl aws, such as:
 Untargeted data collection.
Americans have a right to privacy,
yet this proposal would allow the
IRS to look in on the fi nancial
dealings of every American
consumer and business with
a depository account without
cause. Congress passed legislation
in 1998 that prevents the use
of " fi nancial status or economic
reality examination techniques
to determine the existence of
unreported income ... unless
the Secretary has a reasonable
indication that there is a likelihood
of such unreported income. " The
concerns that motivated this
statutory provision are as relevant
today as they were in 1998 and
must continue to guide Congress.
 Privacy concerns. IRS data
has been breached in the past,
including 100,000 accounts
in 2015. Just this June, the
Government Accountability Offi ce
sent the IRS a letter encouraging
it to improve its data security. A
database containing the fi nancial
information of every American
bank account will be an incredibly
attractive target for hackers.
 New barriers for the unbanked.
Financial inclusion is a high
priority for fi nancial regulatory
agencies, but this proposal would
interfere with this goal. Many
of the unbanked opt out of the
fi nancial system because they
distrust the government. Instead,
This overreaching proposal
would create a huge compliance
burden on community banks
and unnecessarily intrude into
consumers' financial lives.
they turn to check cashers and
nonbank lenders with exorbitant
fees. Indiscriminately reporting
all fi nancial transactions to the
IRS will further discourage the
unbanked from entering the
fi nancial mainstream and could
cause others to leave.
 Too much data to process. The
IRS already collects more data
than it can process, including
data collected under the Foreign
Accounts Tax Compliance Act
(FATCA). Community banks
furnish this data, along with a
huge number of suspicious activity
reports (SARs) and currency
transaction reports (CTRs) to
the Treasury through the Bank
Secrecy Act (BSA). The IRS should
maximize the value of the data it
already has before collecting more.
 Increased tax complexity. The
tax code and its accompanying
paperwork continues to grow, and
this proposal would only add to
the burden. Taxpayers will likely
have to receive new 1099 forms for
every account they hold containing
funds fl ow information that is
not relevant to their tax liability.
Giving taxpayers even more forms
and data to sort through and
evaluate will make tax compliance
signifi cantly more complex
and confusing.
 Community banks are not law
enforcement agencies. While
community banks support closing
the tax gap, fi nancial institutions
should not be saddled with a
complex, expensive burden to
do so. It is an inappropriate role
for private sector institutions
who collect this data for the
sole purpose of serving their
customers by safeguarding their
funds, extending credit, and
providing checking, card and
other payments services.
Help build the coalition
ICBA has built a strong coalition
of allies, and your community
bank can help it grow. ICBA is
developing resources community
banks can use to engage their small
business and retail customers
about this potential reporting
requirement and encourage them
to reach out directly to Congress to
oppose it.
Raise your voice and help
others around you to do the same.
Together, we will be heard. 
Aaron Stetter (aaron.stetter@
icba.org) is ICBA's executive
vice president of policy and
political operations
independentbanker.org Q 41
http://www.independentbanker.org
Independent Banker - September 2021

Table of Contents for the Digital Edition of Independent Banker - September 2021
