WASHINGTON–America’s Credit Unions has submitted a letter to the IRS regarding its planned vehicle loan interest deduction on interest paid on certain vehicle loans as part of the IRS Paperwork Reduction Act notice for Form 1098-VLI.
In the letter the trade group outlined what it said are credit unions’ concerns with Form 1098-VLI, which is intended to help administer the deduction. America’s Credit Unions, which said its supports reasonable information reporting requirements that “promote tax compliance and transparency,” said it sought to underline the “critical importance that new reporting obligations be implemented in a manner that is operationally feasible, clearly defined, and proportionate to their compliance burden.”
Recommendations Made
America’s Credit Unions said that when it comes to Form 1098-VLI, the IRS must:
- Properly allocate responsibility among borrowers, lenders, and third parties. America’s CUs said the statute does not clearly specify who is responsible for determining whether a loan qualifies as a “specified passenger vehicle loan.” America’s Credit Unions noted it has previously raised the issue and again seeks further clarification from the IRS and Treasury. ACU said it is its position that the IRS must clarify that borrowers remain responsible for determining their eligibility for this deduction.
- Revise the burden estimates so that they better reflect the full cost of system changes and operational implementation.
- Provide clear instructions addressing specific data elements to be included in the Form including data on information not currently stored by credit unions (vehicle VINs, model year, make, etc.).
- Minimize burden through use of technology and standardized electronic reporting formats.
The letter can be found here.
