For Immediate Release
Tuesday, October 1, 2002
Ways and Means Vice Chairman Urges Withdrawal of Misguided IRS Regulation
Rep. Phil Crane: "It is not needed to enforce US tax
law and it will drive capital from our economy."
Washington (October 1, 2002) – Representative Phil Crane, Vice Chairman of the House's Ways and Means Committee, today asked the Internal Revenue Service (IRS) to withdraw a proposed regulation that would require the reporting of bank deposit interest paid to nonresident aliens (REG-133254-02). Rep. Crane said that the regulation could "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."
The following is an excerpt from the letter:
"…[I]t 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."
Congressman Crane first contacted the IRS on April 5, 2002 objecting to the previous version of the regulation.
Ways and Means Chairman Bill Thomas also has weighed in on the issue, writing on July 22, 2002, that he is considering "possible hearings in the Ways and Means Committee to further explore this issue."
Link to Rep. Crane's letter:
For more information on the proposed IRS regulation visit CFP's dedicated web page on withdrawing the proposed IRS regulation. (http://www.freedomandprosperity.org/update/irsreg/irsreg.shtml)
Links to additional information:
Letter from 46 Lawmakers Urging Withdrawal of Clinton-Era IRS Regulation: Accuse IRS of Putting Foreign Tax Collectors Ahead of US Economic Interests – April 5, 2002
Letter from House Ways and Means Committee Chairman Bill Thomas – July 22, 2002
Letter from 27 of the Country's Most Prestigious Free Market Groups Urging the Bush Administration to Oppose the Clinton-Era IRS Bank Deposit Interest Regulation – December 19, 2001:
CFP and the Coalition for Tax Competition advocate pulling IRS regulation on the reporting of bank deposit interest paid to nonresident aliens in a letter to the Senate – November 1, 2001
Secretary Paul O'Neill's Statement on sharing information, May 11, 2001
Information on the Coalition for Tax Competition:
For additional comments:
Andrew Quinlan can be reached at 202-285-0244, firstname.lastname@example.org
Dan Mitchell can be reached at 202-608-6224, email@example.com
Veronique de Rugy can be reached at 202-218-4601, firstname.lastname@example.org