Contact Information:

Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia 22310-9998
Phone: 202-285-0244
Fax: 208-728-9639
                                            

CFP Press Release

For Immediate Release
February 7, 2001

Center for Freedom and Prosperity
Denounces New IRS Regulations:
IRS is Putting Desires of Foreign Tax Collectors
Ahead of US Economic Interests

Washington The Center for Freedom and Prosperity today criticized a proposed IRS regulation that would require US financial institutions to report interest income received by nonresident aliens to foreign governments. Andrew Quinlan, the Center's President, condemned the agency, noting that, "Major changes in tax policy should be decided by elected officials, not bureaucrats seeking to advance an ideological agenda of worldwide taxation based on information exchange."

This IRS proposal, which was issued as part of rush of last-minute regulations by the Clinton Administration, is not required by congressional action. "Indeed," Quinlan noted, "the last time lawmakers visited the issue, it was decided that America's economic interests were best served by allowing this income to remain untaxed."

The Center for Freedom and Prosperity also criticized the IRS for trying to hinder fundamental tax reform. According to Quinlan, "It is increasingly clear that a territorial tax system is both simple and pro-growth, which is why major tax reform plans such as the flat tax incorporate this feature. But the IRS wants to take us further down the path to a worldwide system, which is based on governments being able to tax income earned outside their borders."

Quinlan also pointed out that "A territorial taxation promotes competition, protects privacy, and preserves sovereignty. Combined with withholding, it also is the best way to reduce tax evasion."

Quinlan announced that the Center would mount a campaign against the proposed regulation. Stating that, "American tax laws should be based on what is best for the United States, not what is best for foreign tax collectors," he announced that the Center would encourage concerned individuals to register their disapproval during the public comment period. This can be done, he said, through the IRS website at http://www.irs.gov/cgi/regs/fixstring/PROD?Guidance%20on%20Reporting%20of%20D eposit%20Interest%20Paid%20to%20Nonresident%20Aliens

The Center for Freedom and Prosperity is a nonprofit independent organization created to promote market liberalization. For more information please visit our web site at www.freedomandprosperity.org.

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