House passes spending bill without IRS reporting plan

The House passed its version of the Build Back Better reconciliation bill without numerous ICBA-opposed provisions, including the IRS bank reporting proposal.

IRS Plan: ICBA applauded the exclusion of the IRS plan and pledged to continue vocally opposing the proposal as negotiations proceed in the Senate. Several senators are reportedly pressing to include the policy in the Senate version of the spending bill.

Quote: “The omission of the IRS plan from the House bill demonstrates the impact community banks and consumers nationwide are having on the debate via ICBA’s months-long #KeepMyBankingPrivate campaign,” ICBA President and CEO Rebeca Romero Rainey said following the 220-213 vote.

Tax Successes: Following ICBA and community bank advocacy, the House version of the spending plan also excludes numerous other anti-community banking tax provisions to:

• Hike the corporate and capital gains tax rates.

• Limit the 199A deduction for Subchapter S banks.

• Institute taxation of capital gains at death.

• Reduce the estate tax deduction.

• Curb Section 1031 transfers widely used in rural areas.

• Restrict Individual Retirement Account investments.

Outstanding Concerns: Nevertheless, the House bill continues to contain ICBA-opposed provisions, such as:

• Small Business Administration direct lending.

• A new net investment income tax on active S-corp shareholders.

• A surtax on small businesses held in trusts.

Grassroots: With the debate continuing in the Senate, ICBA is encouraging community bankers to weigh in with ICBA resources:

• Opposing SBA 7(a) direct lending.

• Urging Congress to oppose the IRS plan.

• Rallying consumers against IRS bank reporting.

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