(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, announced his continued opposition to legislation that would give the Internal Revenue Service (IRS) sweeping new powers to monitor Americans’ bank accounts. The original proposal would have required banks, credit unions and other financial institutions to annually report on accounts and withdrawals amounting to $600.
Treasurer Folwell signed a letter with 24 other state treasurers, auditors and financial officers with the State Financial Officers Foundation (SFOF) opposing the legislation. After intense pressure from SFOF and more than 40 national trade associations, including the American Bankers Association, the United States Chamber of Commerce and the North Carolina Bankers Association in opposing the new powers, the Biden Administration announced that it has increased the reporting threshold to $10,000.
“The increase to $10,000 does little to change my concerns about this legislation,” Treasurer Folwell said. “This is a cumulative number meaning any bank account with $10,000 of activity, in total, would have to be reported by the financial institution to the IRS. The average American has over $50,000 in activity every year. This would still have a chilling effect on those who are ‘unbanked’ and ‘underbanked’ in America.”
In a previous media release, Treasurer Folwell cited his own experiences growing up with few resources as the basis for his understanding of people who are either unbanked or underbanked. Unbanked Americans are those who do not use traditional banking services because they either do not have enough money or do not trust banking institutions. Underbanked households may have a checking account or savings account but rarely either. It is reported that 25% of all U.S. households are either unbanked or underbanked.
Additionally, the change from $600 to $10,000 would have little effect on the administrative burden on financial institutions. As Chairman of the State Banking Commission, Treasurer Folwell has expressed his concern that the new requirements would be too expensive to implement for many small community banks that serve rural North Carolina, not to mention the impact on average citizens
“For nearly a century we’ve had a voluntary tax system based on the ability to audit,” Treasurer Folwell said. “Everyone knows that there’s room for improvement to make sure citizens pay their fair share, and that no administration is perfect. But as BB&T/Truist Board Chair Kelly King always says, ‘Focus on getting the why right and we can figure out the how.’ But in this case, they didn’t get the ‘how’ right.”
The North Carolina Department of State Treasurer (DST) administers the employee retirement systems for more than 950,000 public workers, along with their 401(k), 457 and 403(b) plans. DST manages the pension plans’ investments currently totaling $122.5 billion. It also oversees the State Health Plan, which provides health care coverage to more than 750,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents. Fiscal assistance and expertise are provided by the department to local governmental units by aiding them in the sale of local government debt obligations and in maintaining sound budgeting, accounting and reporting procedures. The department also administers the NC Cash unclaimed property database.
For more information, visit www.nctreasurer.com.