Cape Girardeau bankers glad IRS reporting plan withdrawn

Proclaiming it a "happy day in the banking world," Jay B. Knudtson, First Missouri State Bank executive vice president and chief banking officer, lauded the news late last week an Internal Revenue Service proposed rule is now off the table.

The Missouri Banking Association (MBA) told its members in a statement Friday the plan to require institutions to turn over financial information for accounts with inflows or outflows totaling more than $10,000 is no longer part of the most recent version of the House budget reconciliation bill.

Knudtson said he was informed of the deletion via email.

"This is really, really good news. When this idea first started, the plan was to start at $600 per transaction and later went to $10,000, but now it's been taken out altogether. I don't know if I recall a regulatory proposal that has both ignited and incited the banking community more than this particular one. This (plan) united everyone in opposition," Knudtson said.

James P. Limbaugh, Montgomery Bank's Cape Girardeau regional president, said he was relieved to hear of the decision.

James P. Limbaugh, Cape Girardeau regional president of Montgomery Bank, speaks during the 2021 Annual Cape Girardeau Area Chamber of Commerce dinner at the Show Me Center on Oct. 21 in Cape Girardeau.Sarah Yenesel

"It was such an overreach by the federal government; it was another example of 'Big Brother.' Let's say you're a farmer, and this happens every day, and you sell 20 head of cattle and the deposit is $13,000. These aren't typically high-net-worth individuals and it just creates an unnecessary (reporting) burden," Limbaugh said.

"Almost every account at every financial institution in the country would be submitted to the IRS if Congress passes this proposal," said Max Cook, MBA President and CEO in a statement made before the plan was shelved.

"This shotgun approach from the IRS will not catch tax evaders. What it will do, without question, is add confusion and anxiety to the lives of everyday Americans who suddenly worry about who's looking at their bank accounts. This is a fundamental violation of an individual's right to privacy. This intrusive, dangerous initiative is simply unacceptable," he said.

Knudtson told the Southeast Missourian he will be watching to see what might happen next on this issue.

"Whether (this idea) could raise its head again, I don't know, but for the time being, this ridiculous and terribly cumbersome proposal has been removed," he said.

Missouri State Treasurer Scott Fitzpatrick announced last month if the IRS proposal had remained and been passed by Congress, he would not comply with the reporting requirement.