November 3, 2003
The Honorable John Snow
U.S. Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Dear Mr. Secretary:
I am writing to express my strong opposition to the proposed regulation requiring U.S financial institutions to report bank deposit interest paid to nonresident alien depositors.
I respectfully request that the Department of the Treasury withdraw the proposed regulation.
There is no reasonable policy or administrative justification for requiring banks to report bank deposit interest paid to nonresident aliens. Under the tax laws, bank deposit
interest paid to nonresident aliens is not subject to U.S. tax. I understand that the objective of this proposed regulation is to promote voluntary compliance through the sharing of nonresident alien bank deposit
information with other countries. Such an objective unnecessarily imposes additional reporting requirements on banking institutions and does not further any revenue collection purpose.
The required reporting of foreign bank deposit interest also deviates from longstanding policies designed to encourage foreign investment in U.S. banks.
If finalized, the proposed regulation would not only result in significant withdrawals of foreign deposits from U.S. banks, but place U.S. banks at a competitive disadvantage in the global marketplace. Finally, this proposed regulation could hinder the average American's access to credit and have disastrous effects on our economy.
Again, I urge you to rescind this proposed regulation.
If you have any further questions, please feel free to contact me or have someone from your staff contact Joyce Meyer of my staff at (202) 225-3031.
Member of Congress