Major US banking lobby groups oppose tax reporting law

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Major US banking lobby groups oppose tax reporting law

Reuters - The largest U.S. banking lobby groups banded together on Friday to make another push to kill a proposed bank account reporting law drawn up as part of the congressional reconciliation package.

In a letter to House Minority Leader Kevin McCarthy and House Speaker Nancy Pelosi, the lobby groups said the proposal would create reputational challenges for small financial services firms, increase the cost of tax preparations for Americans and big businesses and create serious financial privacy concerns. We urge members to oppose any efforts to advance this new reporting regime ill-advised, the groups said in the letter.

While the stated objective of this vast collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population. The proposed domestic account reporting requirement in the $3.5 trillion House package is becoming an important issue for the banking industry, which is opposed to the tax reporting changes that are being pushed forward by the Democrats.

The proposal also opens up significant privacy concerns, which the lobbyists said would prevent taxpayers from taking part in the financial services system and undermine efforts to include vulnerable populations and unbanked households.