This is a developing story. Please stay tuned to Cornerstone’s communications channels for updates.

Cornerstone League has created a landing page and a toolkit to help credit unions raise awareness among their staff and members about the IRS reporting requirement that may be added to Congress’s new budget proposal. Virtually the entire financial services industry opposes this provision, but not everyone outside of financial circles knows about or understands what the provision would do. That’s where this landing page comes in.

We need to unite as a movement and act now to stop this deeply flawed proposal in its tracks. Visit the landing page to download sample assets and social media posts to use in your communications channels with your members.

Why Financial Institutions Oppose the IRS Reporting Provision

The idea for the proposed IRS reporting provision, which Cornerstone League has been battling since July, started with a simple premise: When it comes to increasing tax revenue, it is much easier and more popular to target tax evasion, especially among high earners, than it is to raise taxes for all.

If the provision were to become law, it would take effect in 2023. Credit unions, banks, and other entities would be required to report to the IRS the gross inflows and outflows of both business and individual accountholders and to break those flows down by cash, transactions with a foreign account, and transfers to and from another account with the same owner. The requirements would apply to savings accounts as well as transactional, loan, and investment accounts.

Whether the threshold is set at $600 or $10,000 or more, the provision is deeply flawed. Credit unions will have to spend a significant amount of money and effort on software upgrades, training, and hiring more compliance officers. It can also drive the financially vulnerable from mainstream financial institutions to the often dangerous “cash and carry” model in which their wallets would be their only protection for their earnings, and through which they would neither earn interest on their money nor build their credit history.

And then there are the major privacy concerns. Your members trust your credit union to keep their money safe, but they also expect that their information will be protected. This new reporting burden significantly increases the chance that their information could get into the wrong hands.

Contact Your Lawmaker

Last week, Cornerstone joined other leagues, CUNA, and AACUL in writing to Congress to reiterate our grave concerns about the proposal.

If your credit union has not already done the same, please make your voice heard with a quick letter to your lawmaker to oppose the IRS reporting provision. While you’re at it, please take the time to educate and activate your staff and networks to oppose it as well. Together, we can stop this invasive provision from becoming law.