ICBA has strongly objected to a Biden administration proposal that would require financial institutions to report information on customer bank accounts to the IRS. 

The administration’s fiscal 2022 budget proposal would require banks and other financial institutions to report to the IRS on the deposits and withdrawals of business and personal accounts. Congress is now quickly advancing this proposal in its budget reconciliation package, which needs only a simple majority to pass.

While policymakers are attempting to quell the public backlash against the proposal with minor updates to the proposal, adjusting the reporting threshold or making other tweaks will not salvage this misguided plan.

The proposed tweaks would benefit hardly any taxpayers, make the policy more difficult to implement, and do nothing to address the proposal’s privacy, due process, and data security concerns.

As community bankers and consumers have repeatedly told policymakers, the proposal would:

  • Constitute a broad, unwarranted infringement on the privacy of all bank customers without grounds to suspect tax evasion.
  • Be intrusive and indiscriminate.
  • Undermine the goal of reducing the unbanked.
  • Increase taxpayer complexity and confusion.
  • Overwhelm the IRS with personal financial data and increase risk of data breach.


According to an Independent Community Bankers of America poll conducted by Morning Consult:

  • Two-thirds of voters (67%) oppose the IRS collecting bank account deposit and withdrawal information, with more than half (53%) strongly opposed and just 22% supportive.
    • Opposition to the rule is bipartisan, with 51% of Democrats, 74% of Independents, and 79% of Republicans opposed.
  • More than three in five adults (64%) do not trust the IRS to monitor their deposit and withdrawal information.
    • Including 50% of Democrats, 73% of Independents, and 75% of Republicans.
  • More than half of adults (54%) do not trust the IRS to keep their financial data safe from data breaches.
    • Distrust is highest among voters over the age of 45, those who make under $100,000 per year, and those in suburban and rural areas.
  • 55% of respondents said their banking habits would change if they knew their deposits and withdrawals were being reported to the IRS—potentially driving some out of the banking sector and increasing the number of unbanked individuals.
    • Those who would change their habits include 57% of Democrats and Republicans, 61% of voters in urban areas, and 58% of voters in rural areas.
  • The polling found consumers’ top concerns with the proposal are:
    • The government has no business monitoring financial account transaction histories.
    • The proposal will hurt small businesses, risk double-counting their income, and increase their tax burden and audits.
    • IRS data collection is an invasion of privacy, and the IRS already collects enough information to watch for tax evaders.


  • Community banks do not endorse broad IRS access to their customers’ account information, and consumers should be aware of the potential negative effects of this new proposal.
  • Community bank customers and other consumers can be heard in Washington before this new reporting regime is enacted through a customizable message to members of Congress available at banklocally.org/privacy.
  • ICBA offers community banks customizable email and social media content to inform customers about the proposal and how they can speak out.
  • ICBA is encouraging community bankers to direct their customers to the site to demonstrate that public opposition is widespread, bipartisan, and extends beyond banks themselves.
  • Community bank customers and other consumers are responding in force by sending hundreds of thousands of messages to policymakers in opposition.
  • In fact, community bankers are already reporting: customers withdrawing deposits to avoid government intrusion, a significant social media response, and appreciation from out-of-state consumers for alerting them to the proposal.
  • Meanwhile, ICBA continues urging community bankers to use its Be Heard grassroots action center to call on Congress to oppose the proposal.
  • By weighing in directly with lawmakers on this harmful proposal, consumers can ensure their voice is heard.


  • ICBA has repeatedly expressed opposition to the proposal since it was introduced earlier this year, including in a fact sheet to Congress, a letter to congressional leaders from ICBA’s Minority Bank Advisory Council, a joint letter from ICBA and 44 state community banking associations, a joint letter with groups including NFIB and the U.S. Chamber of Commerce, and more.
  • ICBA will continue to oppose this troubling proposal as Congress drafts and advances tax legislation.