Privacy Risks in IRS Banking Transaction Reporting Avoidable: Industry Experts
- 07.10.2021 06:45 pm
The IRS can avoid the risk of misuse and loss of private data by using analytics software.
FlowTracker Analytics today announced an alternative to reporting banking transactions to the IRS that cuts down privacy risks while providing more relevant information to support the Treasury's tax compliance goals - money flow analysis.
"The IRS doesn't need to know when you move money between your bank accounts or pay down your credit card," says banking industry expert Dave McNab, CEO of FlowTracker Analytics. "But they do want to know when taxpayer returns don't line up with banking activity. There's a less intrusive way of solving this, and we have the technology to do it right now."
Reporting every banking transaction over $600 (including personal identity information) to the IRS would create a gold mine of private data in the Treasury Department, with the risk of abuse or loss to hackers posing serious privacy risks to everyone in the U.S. Experts from across the Financial Industry have expressed concerns to Congress, including the American Bankers Association and the Credit Union National Association. The current proposal would generate millions of false non-compliance signals to be reviewed, at enormous cost to taxpayers and the industry, according to McNab and his team.
McNab explains, "FlowTracker reports the flow of money at the customer level, not transactions. It's just like cash flow statements in annual reports. FlowTracker provides more privacy, less risk, and fewer false signals at much less cost. We turn snapshots of account balances into a movie of money in motion," says McNab, "and that's what the IRS really needs."
McNab and his team have reached out to interested Financial Services Industry organizations, Members of Congress, and the Press to raise awareness of both the risks and challenges of Treasury's proposed banking transaction reporting requirements, and to ensure the benefits of reporting money flows instead are fully considered.
Mr. McNab is available for interviews on request.