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A major U.S. federal agency is using its powers under the Foreign Exchange Management Act to force the financial institutions it regulates to turn over all customer information they hold about their customers.
The IRS will force banks, credit unions and other financial institutions to turn data from foreign exchange transactions and accounts to the government by April 28.
The agency will do so after a Justice Department complaint that accused the IRS of failing to comply with the law.
The IRS says it wants to ensure that Americans are not subjected to “unprecedented scrutiny” of their financial dealings by the government.
It also says the new mandate will help it better protect taxpayers.
It said it’s been able to implement its compliance plan and “rebuild its operations” by eliminating the “highly sensitive information.”
The agency says it has already made substantial progress in improving its oversight of financial institutions, including by expanding the number of people it hires and instituting new requirements for employees to share their work and personal information with federal investigators.
The department says the data sharing requirement will ensure the agency “continues to work to maintain the integrity of financial transactions by preventing fraud and abuse, protecting taxpayers and the American people.”
The agency has been working with the IRS and its inspector general to develop a final rule that would be final and enforceable by the end of the year.
In an interview with the Washington Post, Treasury Secretary Steven Mnuchin said he is optimistic that the government will be able to comply.
“I think the new administration is going to be much more focused on doing this, I think they are going to have a much better understanding of what is required and they are certainly going to do a much more thorough analysis of what the information is and where it comes from and they will be much better at identifying any vulnerabilities that are there in terms of this particular program,” Mnuchin told the Post.
Mnuchin said the IRS’ new rule will require the agency to ensure financial institutions have enough information to tell regulators whether transactions they are subject to are legitimate.
He also said the agency is also “going to require more reporting from financial institutions.”
He said the new requirement would make it easier for the government to keep tabs on financial institutions.
Last week, Mnuchin announced that the Trump administration is ending a rule requiring financial institutions that accept funds from overseas to tell Congress when they are in compliance.
The agency also plans to scrap the rule and make it optional for most financial institutions not to tell lawmakers about financial transactions that occur outside the U..
S., even when they’re occurring under U.A.E. rules.
