McLean Sends Letter to House Ways and Means Chairman Neal on IRS Tax Gap Reporting Proposal

Cooperative Credit Union Association President/CEO Ron McLean sent a letter yesterday in strong opposition to an onerous Internal Revenue Service (IRS) tax gap reporting proposal presently pending before Congress to House Ways and Means Chairman Neal.

The details within the American Families Plan recently unveiled by the Biden Administration have yielded proposals impacting credit unions and other financial institutions to report certain information beyond current requirements which address more than just a taxpayer’s interest earned, capital gains and losses. If adopted, then credit unions could also be required to report “aggregate account outflows and inflows” of more than $600. The result would be the imposition of a new tax reporting mechanism on credit unions about their members’ accounts to the IRS, whether they earned income on that account or not, how much is in the account in a given year, and how much was transferred in and out of the account. In essence, credit unions will become clerks for the IRS reporting member information on transactions which have not yet matured for tax purposes and are non-taxable events.

A copy of the letter may be found HERE.

At this time, it does not appear that the harmful provisions will be included in markup of the tax portion of the Majority’s proposed $3.5 trillion “human infrastructure” reconciliation bill by the House Ways and Means Committee. However, as it may reappear elsewhere, credit unions are advised to be vigilant and are invited to Take Action to contact Members of Congress to record additional opposition.