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Pelosi: There will be new IRS bank reporting requirements but $600 amount negotiable

Banks currently report transactions in accounts that are over $10,000

Updated: October 16, 2021 - 11:56pm

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House Speaker Nancy Pelosi said on Tuesday that new IRS reporting requirements for financial institutions will stay in the Democrats' filibuster-proof reconciliation bill but the $600 amount is part of ongoing "negotiation."

Banks and credit unions currently report cash transactions in accounts that are $10,000 and above. Democrats have proposed lowering that threshold to $600.

When asked if the Democrats are going to leave those IRS requirements in the bill, Pelosi replied, "Yes, yes, yes."

Pelosi was also asked what she has to say to Americans with privacy concerns related to financial institutions monitoring accounts for transactions $600 and above.

"The plural of anecdote is not data. I've said that before here. Yes, there are concerns that some people have but if people are breaking the law and not paying their taxes, one way to track them is through the banking measure," she said. "I think $600, well, that's a negotiation that will go on as to what the amount is."

Small community banks and credit unions have been critical of these new reporting requirements, arguing that they would lead to increased compliance costs.

Democrats in Congress have proposed the $600 reporting requirement as a way to fund the party's budget reconciliation bill that includes much of President Biden's social spending agenda such as universal pre-K and tuition-free community college.

The reconciliation bill was expected to cost up to $3.5 trillion but Pelosi signaled on Tuesday that it will cost less.

“We have some important decisions to make in the next few days so that we can proceed,” Pelosi said. “I'm very disappointed that we are not going with the original $3.5 trillion, which was very transformative."

She declined to say which parts of the current proposal would be removed to lower the cost.

"If there are fewer dollars to be spent, there are choices to be made,” she said.