Requiring banks to give the IRS data on account inflows and outflows would complicate tax enforcement and provide only limited benefits, BPI, ABA and other financial trades wrote in a letter to the Senate Finance Committee’s Subcommittee on Taxation and IRS Oversight this week. The additional reporting requirements, proposed by the White House to target tax evasion and fund a broad childcare spending plan, would have privacy and fairness implications and could put financial institutions in an untenable position with their account holders, the letter states. A more effective approach would be to boost IRS funding to facilitate targeted audits of questionable tax returns, it says.
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