October 1, 2002
Charles O. Rossotti
Commissioner of Internal Revenue
Internal Revenue Service
P. O. Box 7604, Ben Franklin Station
Washington, DC 20044
Dear Commissioner Rossotti,
I am writing to express our deep concern about the re-release of the regulation that would require the reporting of bank deposit interest paid to nonresident aliens. If this regulation is implemented, it will drive
hundreds of billions of dollars of capital out of the American economy – with no increase in revenue to the U.S. Treasury -- putting further downward pressure on financial markets.
Perhaps more importantly, it will make it harder for consumer, homebuyers, and small business owners to obtain loans. This surely will happen if investors decide that America's financial system no longer has a
necessary level of personal privacy. Money that would have been put to work in America instead will be deposited in Switzerland, Hong Kong, and many other financial centers around the world.
The Internal Revenue Service is supposed to enforce the tax laws approved by Congress. It is with some dismay, therefore, that I see that the Service has issued a regulation designed to overturn existing
Congressional intent. On many occasions, Congress has visited this issue, and in every instance has chosen not to tax this income and not to require its reporting. The goal, clearly seen in legislative
discussion, is to attract capital to the American economy where it will be used to create jobs and boost growth.
I urge you to withdraw this misguided regulation. It is not needed to enforce US tax law and it will drive capital from our economy.
Member of Congress