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CFP Press Release, October 28, 2002

For Immediate Release
Monday, October 28, 2002

House Rules Committee Member Denounces IRS Information Sharing Regulation;
Pete Sessions: IRS "Proposal is an Abuse of the Regulatory Process"

Link to Rep. Pete Sessions' letter

Washington DC (October 28, 2002) -- Congressman Pete Sessions (R-TX) is "deeply concerned that the IRS is allowing personal ideology to interfere with the lawful conduct of its regulatory responsibilities." Rep. Sessions, member of both the House Rules Committee and the House Banking Committee, urged the "immediate withdrawal" of the "slightly modified version of a Clinton-era regulation that will require U.S. banks to report the deposit interest they pay to nonresident alien account holders."  Pete Sessions is the latest member of Congress to express his disapproval of the proposed IRS regulation that many experts predict will chase hundreds-of-billions of much needed savings from U.S. bank accounts. In the last few weeks Reps. Phil Crane (R-IL), Mark Foley (R-FL) and Todd Akin (R-MO) have also objected to the proposed IRS rule.

Excerpts from Rep. Sessions' letter:

Abuse of the regulatory process

"This proposal is an abuse of the regulatory process. The IRS is supposed to promulgate regulations to help enforce the laws approved by Congress and signed by the President. But this regulation overturns existing law and clearly flouts Congress' goal of attracting capital to the U.S. economy.

Needs cost/benefit analysis

"[T]he IRS failed to perform a legally required cost/benefit analysis. Indeed, the Service actually had the nerve to claim that this rule is an interpretive regulation and thus exempt from important parts of the law governing regulatory review."

Regulation blocks President Bush's tax reform agenda

"I am worried that this regulation will create a roadblock for the President's tax reform agenda. Almost all tax reform plans are based on key principles, including the fact that income should not be taxed more than one time. Another key principle is territorial taxation, the common sense notion that governments do not try to tax income earned in other nations. Yet the IRS regulation is explicitly designed to help foreign governments impose a second layer of tax on U.S.-source income.

Link to Rep. Sessions' letter:

PDF of Rep. Sessions' letter:

CFP's dedicated web page on withdrawing the proposed IRS regulation.

Rep. Crane's letter:

Rep Foley's letter:

Rep. Akin's Letter:

IRS Regulation:

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