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ASA Opposes Treasury Department Proposal on Deposits and Withdrawals of Banking Accounts

ASA joined over 100 organizations in opposition to a Treasury Department proposal that would require financial institutions to report to the IRS on the deposits and withdrawals of all business and personal accounts, as well as transfers between accounts of the same owner. Per the letter, “we support the goal of improving tax compliance to collect appropriate tax revenues due; however, we object to the broad, untargeted nature of the Treasury proposal. Collection of comprehensive financial account data to determine tax liability must be narrowly targeted. Treasury’s indiscriminate, blanket data collection would be unsupported by any reasonable suspicion of tax evasion.”

Congress has passed legislation to address concerns regarding unreasonable Treasury audit techniques.  Finally, the letter addressed concerns about the IRS’s poor record of data security which exposes taxpayers’ data, compromises their privacy, and makes them vulnerable to identity theft. These concerns could create taxpayer complexity and confusion.  Tax simplicity is an important goal that promotes tax compliance.