The rule will drive capital investment from the U.S., goes against 90-years of Congressional intent, costs more than it benefits, and threatens the lives and human rights of many investors.
The proposed IRS non-resident alien interest deposit reporting requirement received an unfriendly reception at an October 27 hearing held by a subcommittee of the House Financial Services Committee. We were on hand to represent CF&P, and noted that the hearing was both a testament to our success in disseminating the many arguments against the proposed regulation, as well as affirmation of the need to continue fighting vigorously against the IRS proposal.
The Internal Revenue Service has proposed a regulation (133254-02) that would require U.S. financial institutions to report bank deposit interest paid to certain nonresident aliens. The IRS admits that the information is not needed to enforce U.S. tax law, and instead seeks to collect the information so it can be provided to the tax authorities of 15 specified nations. But since nonresident alien depositors easily can shift their funds to other jurisdictions if they wish to protect their privacy, the regulation has attracted considerable opposition. Critics fear the regulation would drive capital from the U.S. economy and undermine the competitiveness of American financial institutions.