Contact Information:

Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia 22310-9998
Phone: 202-285-0244
Fax: 208-728-9639
                                            

Tax Notes International

March 2001

Bankers Voice Opposition to Proposed Regs on Reporting
Requirements for Deposit Interest Paid to Nonresident Aliens

Stephen R. Jonsson of Flagship National Bank, Bradenton, Fla
George W. Koehn of Sun Trust Bank, Orlando, Fla.
William R. McDonald of Citizens Bank, Frostproof, Fla

Stephen R. Jonsson of Flagship National Bank, Bradenton, Fla., has criticized the proposed regs on the reporting requirements for interest on deposits maintained at the U.S. office of banks and paid to nonresident alien individuals, arguing that the regs' reporting requirements would put a heavy burden on his bank.

=============== FULL TEXT ===============

March 14, 2001

The Honorable Paul O'Neill
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Ave., N.W.
Washington, D.C. 20220

Dear The Honorable Paul O'Neill:

[1] As the President and CEO of Flagship National Bank which is located in Bradenton, Florida I am writing to you regarding the proposed regulations on nonresident alien depositors. As a small community bank located on the beautiful west coast of Florida we are fortunate in having an abundance of nonresident alien depositors who make this area their home and help provide jobs that enable this area to thrive.

[2] My experience with these customers of my bank is that they reside in this locale due to many different reasons. These reasons include having children that attend the many athletic training grounds that produce world-class tennis players, soccer players and more recently golf players. Many of these parents enjoy the privacy afforded them in this country about their financial situations and to the best of my knowledge are respected businessmen and not money launder[er]s. Given that many travel for both business and pleasure they tend to leave significant amount of monies on deposits with my institution so that bills can be paid in their absence. This in turn allows me the ability to lend these monies out into the local economy.

[3] Lastly, as a small community bank that already fells the brunt that the federal, state and local governments put on me with all the regulation the last thing that is need[ed] is for my staff to have to be responsible to do additional paperwork in order for the government to track these nonresident alien depositors. My understanding from President Bush's speeches was that government was going to be smaller and more efficient and not shift needless regulations down to small businesses.

[4] Thank you[r] for you attention to this matter and I hope this information will be useful to you as you review the need for additional regulations.

Sincerely,

Stephen R. Jonsson
President and CEO
Flagship National Bank
Bradenton, Florida

 

**********

George W. Koehn of Sun Trust Bank, Orlando, Fla., has urged Treasury to withdraw the proposed regs on the reporting requirements for interest on deposits maintained at the U.S. office of banks and paid to nonresident alien individuals, saying that the regs' reporting requirements will be a tremendous administrative burden and the risk of losing deposits in Florida severe.

=============== FULL TEXT ===============

March 16, 2001

The Honorable Paul O'Neill
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Ave., N.W.
Washington, D.C. 20220

Dear Secretary O'Neill:

[1] I am writing to express my concern over the recently proposed regulation requiring all U.S. banks to periodically report interest paid on nonresident alien individual depositors. As these interest payments are not subject to U.S. tax, this additional reporting requirement will not aid the collection of revenue and may have an unanticipated consequence of the withdrawal of deposits held in U.S. banks by nonresident aliens.

[2] As CEO of SunTrust Bank, Florida, one of my many duties is to ensure we provide the highest level of service to our clients, while, at the same time, meeting the reporting requirements from the various regulatory agencies. Certainly the administrative burden of additional reporting is of concern at a time when we seek to be as efficient as possible in serving our clients' and shareholders' needs. However, the risk of losing deposits in Florida from this valuable source of funding is a much greater worry.

[3] With the present law of treating bank deposits established in the U.S. by nonresident aliens as U.S. source income, but exempt from U.S. withholding tax, the policy has been one that encouraged investment in the U.S. and strengthened U.S. competitiveness.

[4] Imposing this reporting requirement, combined with the number of viable investment opportunities available for nonresident aliens from on U.S. banks, makes the risk of loss significant as well as contrary to current policy. Nonresident aliens hold over $2 billion in deposits in Florida with SunTrust. Replacing this source of funds at a time when deposits growth is a priority for all major banking institutions, would be an insurmountable challenge.

[5] Thank you for giving me the opportunity to voice my concern over this impending regulation. We ask your support by withdrawing this proposal. You may contact me at any time to discuss this at 407-237-6724 or e-mail me at george.koehn@suntrust.com

Sincerely,

George W. Koehn
Chairman, President, and
Chief Executive Officer
Orlando, Florida

**********

William R. McDonald of Citizens Bank, Frostproof, Fla., has expressed concern over the proposed regs on the reporting requirements for interest on deposits maintained at the U.S. offices of banks and paid to nonresident alien individuals, arguing that many of his bank's Canadian customers may stop coming to the Florida community and also withdraw their funds.

=============== FULL TEXT ===============

March 14, 2001

The Honorable Paul O'Neill
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220

Dear Secretary O'Neill:

[1] I am writing to express my concern about a proposed regulation which would require banks to report interest earned by nonresident aliens on their individual deposit accounts to the Internal Revenue Services.

[2] Our bank is a relatively small bank in a small farming community. For this reason we do not have a great many depositors who would be affected. We do, however, have several Canadian customers who winter in mobile home parks in our community. We are concerned that these customers may not only withdraw their funds from our bank but, worse yet, may quit coming to our community if the proposed regulation is adopted.

[3] Needless to say, our Canadian friends are not involved in money laundering. They are important to the economy of our little town and we do not want to run them off. While we would prefer that the proposed regulation not be put into effect, at a minimum we would like to see some reasonable exemptions.

[4] Many thanks for your consideration of our concerns.

Sincerely,

William R. McDonald
President
Citizens Bank
Frostproof, Florida

 

 

 

Return Home

[Home] [Issues] [Tax Competition] [European Union] [IRS NRA Reg] [Corporate Inversions] [QI] [UN Tax Grab] [CFP Publications] [Press Releases] [E-Mail Updates] [Strategic Memos] [CFP Foundation] [Foundation Studies] [Coalition for Tax Comp.] [Sign Up for Free Update] [CFP At-A-Glance] [Contact CFP] [Grassroots] [Get Involved] [Useful Links] [Search] [Contribute to CFP]