WASHINGTON — Banks would be required to spend hundreds of millions of dollars to help the Internal Revenue Service collect business income tax under different bills the Senate and House are expected to pass this week.

Provisions in both bills would make banks report their business customers' credit card income to the IRS, which the Congressional Budget Office estimates would enable the government to collect $9.8 billion of added revenue over 10 years.

In the Senate bill, which could be approved as soon as late Tuesday, those funds would offset the cost of tax provisions meant to help stem the housing crisis.

Though the banking industry supports that legislation, which is chiefly designed to stabilize home prices and reform regulation of Fannie Mae and Freddie Mac, it says the revenue-raising provision would be costly, burdensome, and effectively make banks tax collectors.

The issue touched off debate on the Senate floor Tuesday, as Sen. Mike Crapo, R-Idaho, a member of the Senate Banking Committee, sought to either strike or delay the income-reporting requirement, arguing it would hurt small businesses and require massive technical upgrades to credit card systems.

"I do not believe this provides enough time to make the changes to existing systems and processes, build and test new reporting systems, perform taxpayer identification number matching, and hire and train the personnel needed to implement and comply with the new reporting requirements," he said.

But his amendments to the housing bill were unlikely to be called for a vote because of procedural objections and attempts by Senate leadership to keep debate on the legislation short.

Financial services lobbyists said the reporting requirement would put banks in the awkward position of playing cop and tax collector. In addition to reporting business credit card transactions, institutions would also have to withhold 28% of electronic payments to the merchant when they cannot track the merchant's taxpayer identification number.

"The Congress has been trying for years to have financial institutions serve as watchdogs … and this takes us down that path," said Scott Talbott, the senior vice president for government affairs for the Financial Services Roundtable.

Banks do not want to have a duty to police consumers, he said. "That's the government's role."

Ken Clayton, the American Bankers Association's director of card policy, said a large electronic payment processor has estimated that for each of its 10 payment platforms, the requirement would take about 3,000 man-hours to implement for systems upgrades and other technical changes.

He said the overall impact could "cost hundreds of millions in the aggregate in terms of operational costs industrywide, those costs ultimately to be borne by banks and their business customers."

Paul Merski, the chief economist and director of federal tax policy at the Independent Community Bankers of America, said his organization has several concerns despite trying to work them out with the House and Senate tax-writing committees in conjunction with small-business groups.

"At a minimum we'd like to see this delayed for several years," he said. "The second concern is the impact on the small businesses themselves and their use of credit card transactions, if it will jeopardize in any way the use of small-business financial activity and make their fear of using credit cards or reconciling their reporting with the IRS."

The House is trying to use the credit card income-reporting provision to pay for a different tax issue — a fix to the alternative-minimum tax calculation — which the House is slated to take up today.

For the measure to become law, the two chambers would have to offset costs on the same bill, but because the income-reporting provision is an easy way to raise revenue for the government, it is expected to keep coming back up.

Even though banking trade groups continue to oppose the requirement, several lobbyists privately said they view the provision's enactment as a question of when, not if.

In its last three budget proposals, the Bush administration has suggested requiring banks to report merchants' credit card income to the IRS as a way to narrow the tax gap.

The provision became more attractive after the Democrats restored pay-as-you-go rules, which say legislative costs must be offset to prevent further growth of the national debt.

"We're operating under the assumption that it will still be an issue," Mr. Clayton said. "Whether it's in this bill or in any other bill, it will still be under serious consideration, and we are going to keep getting our concerns out there."

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