Last week the House of Representatives voted with bipartisan support (251-165) to approve an amendment to the Red Tape Reduction Act (H.R. 4078) that would include the recently adopted IRS regulation requiring reporting on nonresident alien interest deposit information among the regulations to be delayed until unemployed drops below 6%.

The IRS has announced that they will adopt an unpopular proposed regulation to require reporting of interest paid to nonresident alien depositors. The interest is not taxable under the US tax code, and both lawmakers and experts predict it will result in a loss of foreign investment in the US.

Secretary Geithner offered little more than ‘you can trust us’ to assuage concerns.

The Center for Freedom and Prosperity Foundation released today a policy brief highlighting the severe economic damage that would result from adoption of an IRS proposal (REG-146097-09) to require U.S. banks to put foreign law above U.S. law by reporting deposit interest paid to non-resident aliens. Entitled, “Proposed IRS Interest Reporting Regulation Threatens U.S. Economy,” the paper is the second in CF&P’s new Libertas series.

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 Center for Freedom and Prosperity Foundation, joined by 23 of the country’s most influential free market and taxpayer rights organizations, sent a letter to Treasury Secretary Timothy Geithner urging withdrawal of an Internal Revenue Service (IRS) regulation that would discourage capital from the U.S. economy and weaken the American financial system.

We are troubled by the Treasury Department’s failure to withdraw a rule that faces near universal opposition, provides no benefit to the U.S., and threatens to drive billions in much needed foreign investment out of the economy. We are therefore writing again to express our opposition to the nonresident alien deposit interest reporting regulation (REG-146097-09), and ask that it be withdrawn.

I’ve written several times about a proposed IRS regulation that would force American banks to put foreign law above U.S. law. I’ve repeatedly warned that the scheme, which would force financial institutions to report the deposit interest they pay to foreigners, is bad economic policy, bad regulatory policy, and bad banking policy. My arguments have […]

The Center for Freedom and Prosperity (CF&P) is participating Wednesday in a conference in the British Virgin Islands, where Dan Mitchell and Brian Garst will outline growing threats to international tax competition and business.

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.