WASHINGTON–The Treasury department is being urged to publish additional information around the rules for deducting interest on certain auto loans, as enacted as part of the recently passed HR 1.
Treasury has also been asked to reduce the related regulatory burden.
In a letter to Treasury Secretary Scott Bessent , America’s Credit Unions made several recommendations to support effective implementation.
The Recommendations
The trade group’s recommendations include:
- The Internal Revenue Service (IRS) should develop and publish a Model Form that credit unions and other financial institutions may use to satisfy reporting obligations. “A clear template for credit unions would eliminate unnecessary confusion over required data fields, help clarify lender information requirements, and promote consistent and accurate reporting.” America’s Credit Unions said.
- Establish a safe harbor protecting credit unions that make a good-faith effort to comply with the new reporting requirements. “Specifically, credit unions should not be held liable for errors or omissions when the borrower incorrectly represents the vehicle’s qualification or use and other circumstances.” America’s Credit Unions said.
- Treasury and the IRS should permit carryforward relief for taxpayers so that if a credit union member “misses the deduction due to a good-faith compliance error, the unclaimed deduction may be applied in a future year.”
- Car dealerships should be responsible for verifying if a vehicle is qualified (defined in H.R. 1 as a car, minivan, van, SUV, pick-up truck, or motorcycle with a gross vehicle weight rating of less than 14,000 pounds, which has undergone final assembly in the U.S.) “These metrics are not easily verifiable by credit unions,” America’s Credit Unions told Treasury.
The trade group offers more information on the new interest deductions roles as part of its Compliance Blog here.
