The National Association of Independent Automobile Dealers (NIADA) today joined more than 40 organizations representing a cross-section of financial and business interests in sending a letter to the Speaker of the House Nancy Pelosi, Minority Leader Kevin McCarthy and all members of the House of Representatives strongly opposing a proposal under consideration as part of the reconciliation package that would establish an expansive new tax information reporting regime on behalf of the members of the NIADA. This misguided proposal would directly impact almost every American and small business with an account at a financial institution.
As described by the Department of Treasury, the proposal would require financial institutions and other providers of financial services to track and submit to the IRS information on the inflows and outflows of every account above a de minimis threshold of $600 during the year, including breakdowns for cash.
“While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population,” the groups wrote. “In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information.”
The groups also expressed concern that the proposal raises significant privacy concerns that could harm efforts to reduce the number of unbanked Americans.
“Privacy concerns are cited as one of the top reasons why individuals choose not to open financial accounts and participate in the financial system,” the groups wrote. “This proposal would almost certainly undermine efforts to reach vulnerable populations and unbanked households.”
NIADA, along with the other cosigners, urge members to oppose any efforts to advance this ill-advised new reporting regime.
The letter follows:
October 14, 2021
The Honorable Nancy Pelosi Speaker of the House
U.S. House of Representatives Washington, D.C. 20515
The Honorable Chuck Schumer Majority Leader
U.S. Senate Washington, D.C. 20510
The Honorable Kevin McCarthy Minority Leader
U.S. House of Representatives Washington, D.C. 20515
The Honorable Mitch McConnell Minority Leader
U.S. Senate Washington, D.C. 20510
Re: Opposition to New Tax Information Reporting Proposal
Dear Speaker Pelosi, Majority Leader Schumer, Minority Leader McCarthy and Minority Leader McConnell:
The undersigned associations representing a cross-section of financial and business interests write to express our strong opposition to a proposal under consideration as part of the reconciliation package that would establish an expansive new tax information reporting regime that would directly impact almost every American and small business with an account at a financial institution. This proposal would create significant operational and reputational challenges for financial institutions, increase tax preparation costs for individuals and small businesses, and create serious financial privacy concerns. We urge members to oppose any efforts to advance this ill-advised new reporting regime.
This proposal, as described by the Department of Treasury, would require financial institutions and other providers of financial services to track and submit to the IRS information on the inflows and outflows of every account above a de minimis threshold of $600 during the year, including breakdowns for cash. While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population. In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information. We believe that this program is costly for all parties, not fit for purpose, and loaded with potential for unintended and serious negative consequences.
The fact that raw data exists somewhere in a system does not mean it is easily compiled or produced. For taxpayers, both individuals and small businesses, the complexity of collecting this information will be invisible, but when tax season arrives, they will face an IRS with vast new data sets to mine, and new questions about account activity that may have no obvious connection to tax liability. Taxpayer confusion and tax preparation costs will increase.
Privacy concerns are cited as one of the top reasons why individuals choose not to open financial accounts and participate in the financial system. This proposal would almost certainly undermine efforts to reach vulnerable populations and unbanked households. In addition to the significant challenges associated with protecting this new data, policymakers should consider the potential consequences of leveraging trusted financial relationships to execute such a large-scale and detailed reporting regime. The American people feel strongly about their right to privacy and it is not reasonable to undermine their financial privacy without a clearly articulated purpose.
As associations representing a broad cross-section of financial and business interests, we urge you to oppose any efforts to institute this new reporting regime.
Sincerely,
Agricultural Retailers Association
Air Conditioning Contractors of America
American Bankers Association
American Farm Bureau Federation
American Financial Services Association
American Hotel & Lodging Association
American Land Title Association
American Lighting Association
American Mold Builders Association
American Rental Association
American Sheep Industry Association
American Supply Association
America’s SBDC
Asian American Hotel Owners Association
Associated Builders & Contractors
Associated Equipment Distributors
Auto Care Association
ACA International
Commercial Food Equipment Service Association
Community Development Bankers Association
Consumer Bankers Association
Convenience Distribution Association
Credit Union National Association
Decorative Hardwoods Association
Electronic Transactions Association
Energy Marketers of America
Family Business Coalition
Financial Executives International
Foodservice Equipment Distributors Association
Gases and Welding Distributors Association
Global Cold Chain Alliance
Hardwood Federation
Heating, Air-conditioning, & Refrigeration Distributors International Independent Community Bankers of America
Independent Electrical Contractors
Independent Insurance Agents & Brokers of America
Industrial Fasteners Institute
Innovative Lending Platform Association
Innovative Payments Association
Institute of Scrap Recycling Industries, Inc.
International Franchise Association
International Warehouse Logistics Association
Main Street Employers Coalition
Manufacturer & Business Association
Manufactured Housing Institute
Metals Service Center Institute
Mid-Size Bank Coalition of America
Mortgage Bankers Association
National Association for the Self-Employed
National Association of Electrical Distributors
National Association of Federally-Insured Credit Unions
National Association of Independent Life Brokerage Agencies National Association of Insurance and Financial Advisors
National Association of Professional Insurance Agents
National Association of REALTORS
National Association of Wholesaler-Distributors
National Bankers Association
National Beer Wholesalers Association
National Cattlemen’s Beef Association
National Community Pharmacists Association
National Cotton Council
National Electrical Contractors Association
National Electrical Manufactures Representatives Association National Fastener Distributors Association
National Federation of Independent Business
National Grain and Feed Association
National Grocers Association
National Independent Automobile Dealers Association
National Marine Distributors Association
National RV Dealers Assoc
National Small Business Association
National Stone, Sand & Gravel Association
National Tooling and Machining Association
North American Association of Food Equipment Manufacturers North American Die Casting Association
North American Millers’ Association
Outdoor Power and Engine Service Association
Pacific-West Fastener Association
Pet Food Institute
Pet Industry Distributors Association
Petroleum Equipment Institute
Plumbing-Heating-Cooling Contractors—National Association Policy Taxation Group
Portland Cement Association
Precision Machined Products Association
Precision Metalforming Association
Promotional Products Association International
Saturation Mailers Coalition
Securities Industries and Financial Markets Association Small Business Council of America
Small Business & Entrepreneurship Council
Small Business Legislative Council
Southwest Council of Agribusiness
Specialty Equipment Market Association
Specialty Tools & Fasteners Distributors Association Subchapter S Bank Association
The Brick Industry Association
The Payroll Group
Tire Industry Association
United Fresh Produce Association
USA Rice
cc: Members of the U.S. House of Representatives
