October 1, 2002
Alexandra K. Helou
Office of Associate Chief Counsel (International).
Internal Revenue Service
P. O. Box 7604, Ben Franklin Station
Washington, DC 20044
Dear Ms. Helou,
Deposits from overseas are a critical source of funds for United States financial institutions and these monies benefit the American economy. This is one of the reasons why I am greatly troubled by the Internal
Revenue Service's recent proposal to require the reporting of interest paid to nonresident aliens. This information is not needed to enforce U.S. tax law. Indeed, Congress specifically has exempted this income from
tax and chosen not to require reporting in order to make America more attractive destination for global capital.
I realize that the Service already has withdrawn this regulation one time, but the decision to only apply the reporting requirement to citizens of 15 specific countries is not an acceptable compromise. First, it is
obvious that the IRS intends to add other nations to the list in the near future. This will be harmful to Florida banks because of our competitiveness for Latin American investors. Second, the IRS should never
overturn existing laws, and Congress has spoken clearly on this issue a number of times. I would hope that the IRS would never pursue an agenda that puts the interests of foreign governments ahead of the interests
of homebuyers, small businesses and other Americans who benefit from a larger capital stock.
Member of Congress