Congressman Pete Sessions (TX) is the latest representative to express concern about proposals to require U.S. banks to report the deposit interest they pay to nonresident alien account holders.
Rep. Sessions, a member of both the House Rules Committee and the House Banking Committee, recently urged the withdrawal of the proposed IRS regulation.
Member of Congress Todd Akin (MO), House Small Business Committee Member, also opposes the information sharing regulation.
He claims that the “new and improved” version of the regulation (previously released as IRS (REG-126100-00) is just as flawed as the initial proposal. *”The IRS’s decision to temporarily exempt certain deposits from the reporting requirement is a transparent effort to divide-and-conquer, one that assumes that lawmakers, and the banking industry, are too foolish to realise the depositors from all nations will be added to the list in a couple of years.”*
Both Congressmen have written to the Internal Revenue Service on this issue.
The Center for Freedom and Prosperity in Washington, D.C. reports that many experts predict such a regulation will chase hundreds-of-billions of much needed savings from U.S. bank accounts. It says:
1. The IRS is abusing its regulatory authority by trying to overturn existing law. Congress approved favorable tax and privacy rules for foreign depositors to attract capital to the American economy. The IRS has no legal authority to overturn this policy.
2. The regulation will harm the U.S. economy by causing money to flee American banks. Foreigners will take their deposits to other nations, and this will mean less capital for car loans, home mortgages, and small business expansion.
The “comment period” for the proposed Regulation ends on November 14, and the CFP is encouraging supporters of the withdrawal to contact the IRS by that date. See link below for CFP’s dedicated web site.