The Market Center Blog

Contact Information:

Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia
22310-9998
202-285-0244

Dump the IRS NRA Regulation

IRS's "Clinton-Lite" Proposed Regulation
Reporting of Deposit Interest Paid to Nonresident Aliens (NRA)

Warmed over Clinton-Era Information Sharing
Regulation is Wrong for America

Last Updated:  April 11, 2006

Headlines
Introduction of Issue
Table of Contents
Op-eds       News Clips

Opposition to the Regulation
Complete List of Opposition to Reg

Congressional Letters   Public Policy Groups   Federal Gov't   Financial Institutions
      
Senate     House      

All Congressional letters (one PDF file)
All Federal Government letters (one PDF file)
All Financial Institution Letters (one PDF file)

Headlines

Coalition for Tax Competition Urges Immediate Withdrawal of Proposed Clinton-Era IRS Regulation ~ March 22, 2006

51 Months is Enough: Coalition Urges Immediate Withdrawal of Proposed Clinton-Era IRS Regulation ~ March 21, 2005

Senior Member of Ways & Means Committee Urges Withdrawal of IRS's Interest Reporting Regulation:  IRS Should Propose Legislation if it wants to Overturn Existing Law

Chairman Oxley and 13 House Financial Services Committee Members Ask for Immediate Withdrawal of "Arbitrary and Discriminatory" IRS Interest Reporting Regulation ~ May 4, 2004

House Leadership Urges Permanent Withdrawal of "Misguided, Clinton-Era Regulation": DeLay, Blunt, Pryce, and Cantor say proposed regulation is harmful to current economic recovery and undermines tax reform agenda ~ April 26, 2004

Manzullo calls for withdrawal of IRS Interest Reporting Regulation for the Second Time in 3 Months ~ April 15, 2004

Independent Study Says IRS Regulation Will Drive $87 Billion Out of U.S. Banks and Raise Interest Rates; Report also Confirms that Agency Abused Regulatory Process ~ April 15, 2004

From CF&P's Market Center Blog: Opposition to IRS Interest Reporting Regulation Grows ~ Friday, March 26, 2004

Led by House Banking and Financial Services Committee member Mark Green, 28 Congressmen Warn that Economic Recovery Could Be Jeopardized If Clinton-Era IRS Regulation is Not Withdrawn ~ March 22, 2004

Rep. Ernest Istook, the Chairman of the Powerful Appropriations Subcommittee that Determines the Budget for the Treasury Department and the IRS, Condemns IRS Interest-Reporting Regulation, Warns of Capital Flight ~ February 11, 2004

Great Primer on Why the IRS's Bank Deposit Interest Reporting Rule is Bad for America -- Heritage Foundation Brief ~ February 3, 200

Georgia Congressman Charlie Norwood Asks for Immediate - and Permanent - Withdrawal of Misguided IRS Rule ~ January 2004

Three Years is Enough: Coalition Urges Withdrawal of Clinton-O'Neill IRS Regulation ~ January 26, 2004

House Small Business Committee Chairman Don Manzullo:  Time to Bury IRS Proposed Information Sharing Regulation ~ January 22, 2004

Eight Ways and Means Committee Members Oppose the IRS's Interest Reporting Regulation

Ways and Means Committee and Joint Economic Committee member, Wisconsin Congressman Paul Ryan, is the seventy-eight Member of Congress (18 Senators and 60 Congressmen) to urge for the withdrawal of the IRS's Interest reporting regulation.

Competitive Enterprise Institute's President Fred Smith' letter to Treasury Secretary Snow opposing the regulation

Senate Opposition to IRS Information Reporting Regulation Intensifies: Bipartisan Letter from Members of Senate Banking Committee Urges Withdrawal of the IRS's Interest Reporting Regulation

Opposition to IRS Information Reporting Regulation Grows:  A Member of the House Leadership Expresses "Strong Opposition" to IRS Reg

Joint Banking Trade Association letter sent to Treasury Secretary John Snow in opposition to the proposed IRS interest reporting regulation from the American Bankers Association, the America's Community Bankers and the Independent Community Bankers of America

Daniel Mitchell: The IRS Vs. The Bill Of Rights

U.S. Chamber of Commerce Joins Coalition Opposed to IRS's Interest Reporting Regulation; Urges Treasury Secretary Snow to Withdraw Proposed Rule

Joel Mowbray on the IRS's Interest Reporting Regulation -- The Washington Times: A taxing Treasury proposal ~ August 14, 2004

Study Explains How the IRS Interest-Reporting Regulation Will Hinder the Fight Against Money Laundering

Testimony Submitted by Andrew F. Quinlan to the Senate Finance Committee (July 15, 2003): Preserving America as an Attractive Location for International Capital: IRS's Interest Reporting Regulation Will Harm U.S. Economy

24 House Members Ask Snow to Permanently Withdraw IRS Interest Reporting Rule

13 GOP Freshmen Ask Treasury Secretary Snow to Permanently Withdraw IRS's Interest Reporting Regulation

CF&P Press Statement: Treasury Official Misrepresents Clinton-Era IRS Regulation in Testimony to Small Business Committee

Nine Members of the Senate Banking Committee, in a Bipartisan Letter, Called on Treasury Secretary John Snow to Withdraw a Clinton-Era IRS Regulation

New York Governor George Pataki Urges Withdrawal of IRS Interest Reporting Regulation

Richard Rahn: Constructive revenge

Andrew Quinlan's Analysis: The IRS vs. Foreign Investment

Three Free Market Leaders Speak Out Against IRS Rule
    
The Heritage Foundation -- Edwin J. Feulner
     Americans for Tax Reform -- Grover G. Norquist
     UBS AG -- Phil Gramm

Nine Senate Banking Members Urge Withdrawal of IRS Interest Reporting Regulation

Five more Senators Come Out Against the IRS Interest Reporting Regulation
     Senator George Allen
     Senator Sam Brownback
     Senator Conrad Burns
     Senator Mike Crapo
     Senator John Ensign

Spencer Bachus, Chairman of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Urges Secretary Snow to Permanently Withdraw IRS Interest Reporting Regulation

Florida Bankers Association Sets the Record Straight: Proposed IRS Reg is Not "Good Policy"

More US Senators Criticize IRS Interest-Reporting Rules

Senator James Inhofe Asks Treasury Secretary Snow to Withdraw IRS Regulation

Senator Gordon Smith Warns Treasury Secretary Snow:  Proposed IRS Rule WIll Put U.S. Financial Markets at a Competitive Disadvantage

Insight Magazine: Proposed Regulation Ignites Power Struggle

CFP Foundation Study Finds that the IRS is Undermining Congressional Intent and Subverting Rule-of-Law: Congress Designed Law to Attract Capital to the U.S. Economy
 

House Small Business Committee Chairman Will Hold Hearings On IRS Interest Reporting Reg

Senator Nickles Asks Treasury Secretary Snow to Review the IRS's Interest Reporting Regulation

Southeastern Legal Foundation's Memorandum on the U.S.'s treaty obligations and the proposed IRS Interest Reporting Regulation

Financial Service Committee Chairman Michael Oxley Warns IRS Reg Could Impose "Significant New Regulatory Burdens." Questions Why Service is Seeking to Overturning Congressional Policy

More Members of Congress Oppose the IRS's Interest Reporting Regulation Proposed Rule Would Undermine The Pro-Growth Provisions Of President Bush's Tax Package According to 29 Lawmakers

Coalition for Tax Competition Praises Bush Tax Reform Plan; But Warns Proposed IRS Interest Reporting Rule Could Undermine President's Policies

FDIC Warns IRS Regulation Threatens Saftey and Soundness of U.S. Banking Sector

Robert Novak: Closing the American tax shelter

Dan Mitchell: IRS undermining the White House?

ABA Strongly Opposes IRS Interest Reporting Regulation

Ten House Lawmakers Urge OMB to Review IRS's Interest Reporting Rule

Senators Hatch, Bennett, and Nickles Oppose IRS Rule

Congressman Ney and 16 other Members of Congress Urge Withdrawal of Regulation

Small Business Committe Rep. Don Manzullo Urges Withdrawal and May Hold Hearings

Congressional Opposition Grows to Proposed IRS Nonresident Alien Interest Reporting Regulation -- Links to Individual Letters

News Accounts of IRS Hearing, December 5, 2002

CFP Joins Seven Other Coalition for Tax Competition Members and Testifies before the IRS Against the Proposed Nonresident Alien Interest Reporting Regulation: Links to all Available Remarks ~ December 5, 2002

Quinlan's IRS Hearing Testimony ~ December 5, 2002

20-Plus Comment Letters on the IRS's Interest Reporting Regulation, Including All Banking Associations and Free-Market Citizen Groups

Heritage Foundation ExecMemo on the IRS's Proposed Interest Reporting Rule (Great Primer!)

The American Banker: Second Thoughts on Second Foreign Deposit Plan by IRS

Coalition Seeks "Immediate" Withdrawal of IRS Interest Reporting Rule

Individual Letters from Free Market Groups to IRS on Proposed Regulation

SBA Opposition to IRS Rule: Office of Advocacy of the U.S. Small Business Administration Objects

Congressional Opposition to Proposed IRS Nonresident Alien Interest Reporting Regulation -- Links to Individual Letters


Table of Contents

  1. The Proposed Regulation
     
  2. CFP Continues Campaign Against Illegal IRS Regulation
     
  3. Why is the Regulation Wrong for America Coalition Press Release
     
  4. Regulation is Un-American
     
  5. Op-eds
     
  6. News Clips
     
  7. Dan Mitchell's Heritage Foundation Executive Memorandum
     
  8. Andrew Quinlan's Analysis: The IRS vs. Foreign Investment
     
  9. Recent Congressional Letters in Opposition to Regulation.
     
  10. Letters to Congress and Bush Administration from CFP and the Coalition for Tax Competition on the Clinton Administration's similar proposed IRS regulation
     
  11. Letter from 46 Lawmakers Urging Withdrawal of Clinton-Era IRS Regulation
     
  12. Mitchell: Editorial Blasts IRS Regulation
     
  13. Comments and Information on the Clinton Administration's version of the same proposed regulation

 

Introduction to IRS Interest Reporting Regulation

In the waning days of the Clinton Administration, the IRS proposed a regulation to force American banks to report the interest paid to all nonresident aliens. This proposal was bad policy for a number of reasons. It would drive capital from U.S. banks. It would undermine tax reform. And it represented a flagrant abuse of the regulatory process. This proposal drew heated opposition from both industry and the public policy community. More than 99 percent of the submissions during the public comment period were hostile, and 100 percent of the testimony at the public hearing was negative. Numerous members of Congress weighed in against the proposed regulation, and CFP mounted a strong lobbying campaign against the IRS scheme. About 18 months after the regulation was first proposed, this effort bore fruit. The IRS was forced to withdraw the regulation.

But in a duplicitous move, the IRS almost immediately re-issued the regulation after some cosmetic changes. Even worse, it appeared that certain segments of the financial services industry were tricked by the IRS bait-and-switch routine and planned to remain neutral, weakening the pro-tax competition coalition. Notwithstanding the odds, the Center for Freedom and Prosperity re-launched its battle against the regulation. Once again, the proposal attracted overwhelming opposition. In a mirror-image of the first fight, more than 99 percent of the public comments were against the regulation and the public testimony was unanimously negative to the IRS scheme as well. Many members of Congress also announced opposition to the new proposal.

There was considerable fear that the IRS would try to finalize the regulation before the end of the year (in part to give back-door support to the EU since the regulation could be misinterpreted as an "equivalent measure" and thus a sign of U.S. support for the Savings Tax Directive). Fortunately, this did not happen. But this may only be a short-term victory. The Treasury Department is actively pushing the proposal even though it puts the interests of foreign tax collectors above U.S. law and before the interests of the American economy. The Coalition for Tax Competition will continue to fight hard to block the regulation, and opponents also believe that a legal challenge will be successful if the proposal is finalized.

2003 Prognosis: The President's new economic team probably will decide this issue. If the decision goes the wrong way, expect a legal challenge since the regulation contravenes existing law and the IRS also failed to obey regulatory procedures such as preparation of a cost-benefit analysis.

 

1) The Proposed Regulation

The proposed regulation (REG-133254-02) would require U.S. banks to report to the IRS the amount of bank deposit interest paid to foreign depositors, even though the IRS admits that this information is not needed to enforce U.S. tax law and is being requested solely for the benefit of foreign governments.

The proposed regulation is based on a similar regulation (REG-126100-00) proposed during the final days of the Clinton Administration. The only significant difference is that the original Clinton regulation required reporting on all foreign depositors, whereas the latest proposal targets residents of 15 major nations.

IRS New Proposed Regulation:
http://www.treasury.gov/press/releases/reports/po33011.pdf

 

CFP Continues Campaign Against Illegal IRS Regulation

The IRS's new regulation is old garbage in a new wrapper. The only difference between the new regulation and the original regulation is that the new regulation targets 15 specific countries. But even this difference is meaningless since the IRS is already hinting that the rest of the world's countries will be added to the list within two or three years. CFP was a leader in killing the Clinton regulation and we will work just as hard over the next few months to knock-off its mutant sibling.

We are determined to win, especially since the EU bureaucrats will try to mischaracterize the IRS regulation as a sign of support for the Savings Tax Directive (by claiming it is an "equivalent measure"). The EU is making this claim, even though Kenneth Dam, Deputy U.S. Treasury Secretary, sent a letter July 31 to the European Union and stated: "There is no linkage with the EU Savings Directive and our actions should not be considered to anticipate the outcome of the technical discussions regarding the proposed EU Savings Directive that we agreed in May should continue. Indeed, any suggestion that our action here anticipates eventual support for the proposed EU Savings Directive could adversely affect the technical-level discussions."

While we think it is good that Mr. Dam made these comments and denied linkage, we notice that the Treasury Department bureaucrats who drafted the letter made it appear that the United States was still considering the Savings Tax Directive. Yet as the Strategic Memo mentioned above explains, the White House already has rejected the ill-advised proposal. This is why the Center's continuing work is so important.

 

Why is the Regulation Wrong for America -- Coalition Press Release

Coalition for Tax Competition Press Release on Why the Proposed IRS Regulation is Bad for America
http://archive.freedomandprosperity.org/press/p08-05-02/p08-05-02.shtml

EXCERPTS:

Andrew Quinlan:

According to Andrew Quinlan, President of the Center for Freedom and Prosperity, "This proposed regulation will drive capital out of America and hurt U.S. financial markets. This 'new' regulation is based on the same misguided policies the Clinton Administration tried to sneak through during its last few days. Unfortunately, the IRS apparently puts the interests of foreign tax collectors above the interests of the American people, but we are confident that the Bush Administration will withdraw this 'Clinton-Lite' regulation at the first possible moment since it clearly undermines the President's economic growth agenda." Mr. Quinlan added, "The Coalition for Tax Competition will encourage taxpayers to make their voices heard during the public comment period. We expect this grassroots opposition, combined with testimony against the proposal, will help torpedo this tax harmonization scheme."

Daniel Mitchell:

Daniel Mitchell, Senior Fellow at the Heritage Foundation, stated, "This proposed regulation is a gross abuse of the regulatory process, which is probably only to be expected since the agency is still headed by a Clinton-appointed Commissioner. The IRS is supposed to enforce legislation enacted by Congress, yet the agency is trying to use bureaucratic edicts to overturn existing law." Mitchell also noted that, "The IRS also failed to conduct legally required cost-benefit analysis, further demonstrating the agency's disregard for the law."

Veronique de Rugy:

The Cato Institute's Veronique de Rugy urged Treasury Secretary Paul O'Neill to gain control of the bureaucracy at Treasury, commenting that, "While Paul O'Neill is racking up frequent flyer miles, a Clinton-appointed IRS Commissioner is issuing regulations that would require automatic sharing of confidential financial information with foreign governments even though this is contrary to the Treasury Secretary's public statements.  In fact, the Secretary is on record saying that private financial information should only be shared with other governments in response to specific requests with proper safeguards and upon demonstration of probable cause." Ms. de Rugy said, "This failure to defend U.S. interests is particularly frustrating since Europe's welfare states are using the World Trade Organization and the European Union to undermine America's competitive advantage in the global economy."

Grover Norquist:

If implemented, critics fear the regulation would hinder pro-growth tax reform. Grover Norquist, President of Americans for Tax Reform, explained that, "All proposals to fix the tax code, such as the flat tax, are based on common-sense principles such as taxing income only one time and taxing only income inside our borders. The IRS regulation is a slap in the face for those who support tax reform since it would help foreign governments double-tax income that is earned in America."

Eric V. Schlecht:

The proposed regulation is based on a similar regulation proposed during the final days of the Clinton Administration. The only significant difference is that the original Clinton regulation required reporting on all foreign depositors, whereas the latest proposal targets residents of 15 major nations. Eric V. Schlecht, Director of Congressional Relations for the National Taxpayers Union, explained, "This modification is virtually meaningless since it is widely understood that the IRS will add all other nations, particularly those from Latin America, to the list within a few years if this misguided regulation is finalized. "

Richard Rahn:

Richard Rahn, Senior Fellow at the Discovery Institute, urged the President's economic team to get more involved. According to Rahn, "Bureaucrats at Treasury and the IRS are ideologically motivated to pursue tax policy that will undermine President Bush. Without strong supervision from the White House, these bureaucrats will implement policies that weaken America."

###

 

Recent Congressional Letters in Opposition to IRS Regulation

Senators

Wayne Allard

George Allen

Robert Bennett (1 ) (2 )

Sam Brownback

Jim Bunning

Conrad Burns

Mike Crapo

Elizabeth Dole

John Ensign

Michael Enzi

Chuck Hagel

Orrin Hatch

James Inhofe

Zell Miller

Don Nickles

Rick Santorum

Gordon Smith

John Sununu

Members of the House of Representatives

Robert Aderholt

C

Todd Akin

I A C G

Spencer Bachus

I

Richard Baker

E

J. Gresham Barrett

G

Roscoe Bartlett

G

Bob Beauprez

D

Judy Biggert

C

Rob Bishop

D

Roy Blunt

H

Allen Boyd

E

Michael Burgess

D E

Dan Burton

A  C E

Chris Cannon

A  B C G

Eric Cantor

I H

John Carter

D  E

Chris Chocola

D G

Tom Cole

D

Michael "Mac" Collins

F

Phil Crane

 I A C E F G

John Culberson

G

Randy "Duke" Cunningham

E

Jim Davis

A  C

Nathan Deal

G

Tom DeLay

H

Jim DeMint

A C E G

Lincoln Diaz-Balart

A C E

Jennifer Dunn

F

Philip English

F

Tom Feeney

D

Mark Foley

I A B C E F G

Randy Forbes

A C E

Vito Fossella

J

Trent Franks

D

Scott Garrett

E G

Mark Green

G

Katherine Harris

D

Melissa Hart

C

J.D. Hayworth

A  C

Jeb Hensarling

D

Wally Herger

F

Peter Hoekstra

C  E

Darlene Hooley

J

John Hostettler

C

Steve Israel

J

Ernest Istook

I

Walter Jones

E G

Sue Kelly

J

Mark Kennedy

G

Jack Kingston

I C E

Mark Kirk

C

Ron Lewis

F

Frank Lucas

E

Don Manzullo

I1 I2 A  C

Jim Matheson

J

Gregory Meeks

B  C

Gary Miller

G

Jeff Miller

C G

Dennis Moore

J

Tim Murphy

D

Sue Myrick

G

Bob Ney

A  B C

Charlie Norwood

I

Butch Otter

A  B C G

Michael Oxley

I

Ron Paul

I A B C  E G

Stevan Pearce

D

Mike Pence

C

Joseph Pitts

A  B C G

Jon Porter

D  E

Deborah Pryce

H

Jim Ramstad

F

Rick Renzi

E

Tom Reynolds

G

Ileana Ros-Lehtinen

A B C

Mike Ross

J

Edward Royce

C

Paul Ryan

I

James Saxton

E

Pete Sessions

I B  C E G

John Shadegg

C G

Clay Shaw

I

Christopher Shays

E

Cliff Stearns

C  E

John Sullivan

G

Lee Terry

G

Pat Tiberi

C

Patrick Toomey

E G

David Vitter

G

Melvin Watt

B  C

Dave Weldon

C

Roger Wicker

G

Joe Wilson

A  C

Legend:

(ALetter to Treasury Secretary Paul O'Neill from U.S. Representative Bob Ney and 16 of his Colleagues ~ December 3, 2002

(BLetter to OMB Director Mitchell Daniels from U.S. Representative Bob Ney and 9 of his Colleagues ~ December 20, 2002

(CLetter to President George Bush from U.S. Representative Pat Toomey and 28 of his Colleagues ~ January 10, 2003

(DLetter to Treasury Secretary John Snow from U.S. Representative Jeb Hensarling and 12 of his Freshman GOP Colleagues ~ May 1, 2003

(ELetter to Treasury Secretary John Snow from Congressmen Mark Foley, Walter Jones and 22 of their Colleagues ~ May 16, 2003

(FLetter to Treasury Secretary John Snow from 8 Ways and Means Committee Members ~ December 8, 2003

(G) Letter to Treasury Secretary John Snow from U.S. Representative Mark Green and 27 Members of Congress ~ March 18, 2004

(H) Letter to Treasury Secretary John Snow from House Majority Leader Tom DeLay, Majority Whip Roy Blunt, Republican Conference Chairman Deborah Pryce and Chief Deputy Majority Whip Eric Cantor ~ April 22, 2004

(J) Letter to Treasury Secretary John Snow from Chairman Oxley and 13 House Financial Services Committee Members Asking for the Immediate Withdrawal of  the "Arbitrary and Discriminatory" IRS Interest Reporting Regulation ~ May 4, 2004

(I)  Individual Letter

         Todd Akin ~ October 16, 2002

         Spencer Bachus ~ February 24, 2003

         Eric Cantor  ~ September 24, 2003

         Phil Crane ~ October 1, 2002

         Mark Foley ~ October 1, 2002

       Ernest Istook ~ February 11, 2004

         Jack Kingston ~ November 14, 2002

         Don Manzullo
              
Letter #1 ~ November 5, 2002
              
Letter #2 ~ December 18, 2002

        Charlie Norwood ~ January 20, 2004

         Michael Oxley ~ January 16, 2003

         Ron Paul ~ November 13, 2002

         Paul Ryan ~ November 3, 2003

         Pete Sessions ~ October 18, 2002

Clay Shaw ~ September 30, 2004


New York Governor George Pataki
http://archive.freedomandprosperity.org/pataki.pdf

46 Members of Congress Letter April 5, 2002 Letter to President Bush
http://archive.freedomandprosperity.org/ltr/weldon-nra/weldon-nra.shtml

 

Regulation is Un-American

We live in a democracy, meaning that laws are made by elected officials rather than unelected bureaucrats. Yes, agencies have the authority to issue rules, but only rules that implement laws that have gone through the legislative process. At no point, though, has Congress approved legislation indicating that it wants to impose this new reporting requirement on banks. The IRS should not try to change laws. And they certainly should not try to change laws when the likely outcome will be to drive capital out of the United States and undermine our economy's performance. If it is to be decided that foreign-owned accounts at US banks should be taxed, elected lawmakers should be the ones making the decision. And if they do make that decision, the tax should flow to the US Treasury, not to a foreign government. There is a simple principle that the IRS should realize: Countries have the right to tax income that is earned inside their borders.  

The IRS is wrong to risk our economy's performance just so they can help foreign governments tax income that is being earned in America. This regulation is against America's economic interests. It undermines America's sovereign right to tax the income that is earned inside our borders. The proposed regulation replaces the Constitutionally prescribed lawmaking process with bureaucratic edicts.

 

Dan Mitchell's Heritage Foundation Executive Memorandum

See Dan Mitchell's Heritage Foundation Executive Memorandum linked below for a short and direct explanation of why this proposed regulation will discourage investment in America, goes against Congressional intent and is bad tax policy. Link below to memorandum:

July 5, 2001, The Heritage Foundation Executive Memorandum (No. 757), by Daniel J. Mitchell, Ph.D., Proposed IRS Regulation Flouts Congress and Would Harm the Economy
http://www.heritage.org/library/execmemo/em757.html

 

Letters to Congress and Bush Administration from CFP and the Coalition for Tax Competition on the Clinton Administration's similar proposed IRS regulation

CFP advocates pulling IRS regulation on the reporting of bank deposit interest paid to nonresident aliens in a letter to the Senate
http://archive.freedomandprosperity.org/press/p11-06-01/p11-06-01.shtml

CFP Asks OMB to Review Clinton-Era Bank Deposit Interest Regulation: IRS Should Not Harm U.S. Economy By Helping Foreign Governments Tax Income Earned in America -- 26 of the Country's Most Prestigious Free Market Groups Join CFP in Letter to Bush Administration
http://archive.freedomandprosperity.org/press/p12-19-01/p12-19-01.shtml

 

Letter from 46 Lawmakers Urging Withdrawal of Clinton-Era IRS Regulation

Letter from 46 Lawmakers Urging Withdrawal of Clinton-Era IRS Regulation: Accuse IRS of Putting Foreign Tax Collectors Ahead of US Economic Interests April 9, 2002
http://archive.freedomandprosperity.org/press/p04-09-02/p04-09-02.shtml

 

Mitchell: Editorial Blasts IRS Regulation

Treasury Secretary Paul O'Neill has spent a lot of time traveling the world lately, following his well-publicized trip to Africa with visits to nations such as Brazil, Uruguay and Argentina.

But perhaps he should spend more time at home. In particular, he needs to provide some adult supervision at the Internal Revenue Service, which seems intent on enhancing its bad reputation.

Its heavy-handed tactics and disregard for civil liberties are so legendary . . .

. . . The most recent IRS outrage is a proposed regulation that would require U.S. banks to report how much interest they pay depositors from 15 nations, including France and Germany. But this attack on financial privacy is completely unnecessary: The IRS admits this information isn't needed to enforce U.S. tax law and is being requested solely for the benefit of foreign governments.

It's clear, though, that the regulation could cause significant damage. For instance, it would: Make it harder for Americans to get loans Hurt American financial markets Disregard existing law Hinder tax reform [Link to full article below:]

August 20, 2002, The Washington Times, by Daniel J. Mitchell, IRS at play while O'Neill is away
http://www.washtimes.com/commentary/20020820-25550868.htm

 

Op-eds and papers

Spring 2004, Regulation, By Jay Cochran, Mercatus Reports: Commentary -- The IRS's Missing 'Check'
http://archive.freedomandprosperity.org/jaycochran.pdf

March 9, 2004, Mercatus Center at George Mason University's Working Papers in Regulatory Studies: An Economic Analysis of the Proposed IRS Rules Governing the Reporting of Deposit Interest Paid to Nonresident Aliens, by Jay Cochran, III
http://www.mercatus.org/pdf/materials/635.pdf

December 30, 2003, The Washington Times, By Richard W. Rahn, How far will the dollar fall?
http://www.washtimes.com/commentary/20031229-091559-8339r.htm

October 3, 2003, The Washington Times, By Richard W. Rahn, Self-inflicted wounds
http://www.washtimes.com/commentary/20031002-084033-5835r.htm

September 22, 2003, The Heritage Foundation, by Daniel Mitchell, The IRS Vs. The Bill Of Rights
http://www.heritage.org/Press/Commentary/ed092203a.cfm

August 14, 2003, The Washington Times, By Joel Mowbray, A taxing Treasury proposal
http://www.washtimes.com/op-ed/20030813-091813-8115r.htm

July 2003, Prosperitas (Volume III, Issue III): How the IRS Interest-Reporting Regulation Will Undermine the Fight Against Dirty Money, by Daniel J. Mitchell
http://archive.freedomandprosperity.org/Papers/irsreg-dm/irsreg-dm.shtml

July 15, 2003, Testimony Submitted by Andrew F. Quinlan to the Senate Finance Committee, Preserving America as an Attractive Location for International Capital: IRS's Interest Reporting Regulation Will Harm U.S. Economy
http://archive.freedomandprosperity.org/Papers/quinlan-finance/quinlan-finance.shtml

March 20, 2003, The Washington Times, by Richard W. Rahn, Constructive revenge
http://www.washtimes.com/commentary/20030320-71181160.htm

March 5, 2003, National Center for Policy Analysis: Brief Analysis No. 431, by Andrew F. Quinlan, The IRS vs. Foreign Investment
http://www.ncpa.org/pub/ba/ba431/

Winter 2003, Offshore Finance U.S.A., by Veronique de Rugy, Misguided Initiative: A new US Treasury regulation could drive billions of dollars out of the US economy
http://www.cato.org/research/articles/derugy-030201.pdf

January 30, 2003, The Washington Times, by Daniel J. Mitchell, Cleaning up the mess at the IRS
http://www.washingtontimes.com/commentary/20030130-99901490.htm

January 2003, Southeastern Legal Foundation Memorandum, Dan R. Mastromarco, Proposed IRS Regulation and Data Collection Requirements
http://archive.freedomandprosperity.org/slf-memo.pdf

January 2, 2003, The Washington Times, by Dan Mitchell, IRS undermining the White House?
http://www.washtimes.com/commentary/20030102-32220256.htm

January 2003, by Denis A. Kleinfeld, The Kleinfeld Law Firm, Beware the new IRS!
http://www.offshoreinvestment.com/current_issue/letter_miami/main.html

December 30, 2002, Chicago Sun Times, by Robert Novak, Closing the American tax shelter
http://www.suntimes.com/output/novak/cst-edt-novak30.html

December 23, 2002, Tax Notes, By Dan R. Mastromarco and Lawrence A. Hunter, The 'U.S. Anti-Savings Directive'
http://archive.freedomandprosperity.org/anti-savings_directive.pdf

October 30, 2002, Citizens for a Sound Economy, by Wayne Brough, A Brotherhood of Taxes: The Internal Revenue Service is gearing up a regulation that would threaten financial privacy, further the goals of an international tax cartel, and deal a blow to the U.S. economy, all in one fell swoop.
http://www.cse.org/informed/issues_template.php/1155.htm

September 10, 2002, The Heritage Foundation, Edwin J. Feulner's letter to Treasury Secretary Paul O'Neill on Global Tax Competition
http://archive.freedomandprosperity.org/ltr/feulner/feulner.shtml

 

News Clips

May 4, 2004, The Market Center Blog, Independent study says IRS regulation will drive $87 billion out of U.S. banks.
http://archive.freedomandprosperity.org/blog/2004-05/2004-05.shtml#046

April 27, 2004, Bureau of National Affairs, GOP Leaders Ask Snow to Drop Rules on Nonresident Alien Interest Reporting
http://pubs.bna.com/ip/BNA/der.nsf/is/a0a8m4q6k8

April 27, 2004, The Market Center Blog, House leadership blasts Clinton-O'Neill IRS regulation.
http://archive.freedomandprosperity.org/blog/2004-04/2004-04.shtml#274

March 26, 2004, The Market Center Blog, Opposition to IRS Interest Reporting Regulation Grows.
http://archive.freedomandprosperity.org/blog/2004-03/2004-03.shtml#266

March 25, 2004, Tax-News.com, by Mike Godfrey, Congressmen Urge Snow To Withdraw Interest Reporting Regulation
http://www.tax-news.com/asp/story/story.asp?storyname=15499

January 28, 2004, Tax-News.com, by Mike Godfrey, Interest Reporting Proposal Will Damage US Banking Sector Says Lawmaker
http://www.tax-news.com/asp/story/story.asp?storyname=14886

January 27, 2004, Tax-News.com, by Mike Godfrey, CFP Urges Withdrawal Of Clinton-Era Tax Regulation
http://www.tax-news.com/asp/story/story.asp?storyname=14862

January 27, 2004, Bureau of National Affairs, By Katherine M. Stimmel, Free Market Interest Groups Urge Treasury To Withdraw Alien Interest Reporting Rules
     See
www.bna.com for full article

January 6, 2004, Tax-News.com, by Leroy Baker, Foreign Investors Will Not Be Deterred By Interest Reporting Rules, Says Treasury
http://www.lowtax.net/asp/story/frontstory.asp?storyname=14657

January 2004, U.S. Treasury International Capital Reporting System, Chart CM-A -- U.S. Liabilities to Foreigners Reported by U.S. Banks, Brokers and Dealers with Respect to Selected Countries
http://www.treas.gov/tic/exhibita.pdf

December 17, 2003, LawAndTax-News.com, by Glen Shapiro, Six New Ways And Means Committee Members Object To IRS Information Reporting Plan
http://www.tax-news.com/asp/story/story.asp?storyname=14458

October 23, 2003, LawAndTax-News.com, by Glen Shapiro, Opposition To IRS Reporting Regulation Intensifies
http://www.tax-news.com/asp/story/story.asp?storyname=13782

September 4, 2003, LawAndTax-News.com, by Glen Shapiro, US Chamber Of Commerce Attacks Treasury Over Interest Reporting
http://www.tax-news.com/asp/story/story.asp?storyname=13205

August 15, 2003, AMS Group, US Treasury Continues To Push For Foreign Interest Reporting
http://www.iofc.net/amsgroup/story.asp?storyname=13001

July 10, 2003, Tax-News.com, by Mike Godfrey, CFP Attacks IRS Interest Reporting Rule At Senate Hearing
http://www.tax-news.com/asp/story/story.asp?storyname=12563

May 26, 2003, LawAndTax-News.com, by Glen Shapiro, 24 House Members Call For Permanent Repeal Of US Interest Reporting Rule
http://www.tax-news.com/asp/story/story.asp?storyname=12011

May 12, 2003, Tax-News.com, by Mike Godfrey, More Congressmen Criticise IRS Bank Interest Reporting Rules
http://www.tax-news.com/asp/story/story.asp?storyname=11853

March 14, 2003, Tax-News.com, Members Of Senate Banking Committee Attack IRS Interest Reporting Plans
http://www.tax-news.com/asp/story/story.asp?storyname=11145

March 6, 2003, Tax-News.com, More Congressmen Attack IRS Interest-Reporting Proposals
http://www.tax-news.com/asp/story/story.asp?storyname=11048

March 3, 2003, Insight on the News, By Jamie Dettmer, Proposed Regulation Ignites Power Struggle
http://www.insightmag.com/main.cfm?include=detail&storyid=370625

February 21, 2003, Tax-News.com, by Mike Godfrey, More US Senators Criticize IRS Interest-Reporting Rules
http://www.tax-news.com/asp/story/story.asp?storyname=10906

February 13, 2003, Tax-News.com, Washington Institute Publishes Study Rubbishing IRS Interest-Reporting Plans
http://www.tax-news.com/asp/story/story.asp?storyname=10818

February 12, 2003, United Press International, Whose rules... (5th item)
http://www.upi.com/view.cfm?StoryID=20030211-045521-3927r

February 7, 2003, Tax-News.com, by Mike Godfrey, House Chairman Will Hold Hearings On Interest Reporting Issue
http://www.tax-news.com/asp/story/story.asp?storyname=10765

January 21, 2003, Tax-News.com, by Mike Godfrey, House Financial Services Chairman Writes Treasury Against Interest Rules
http://www.tax-news.com/asp/story/story.asp?storyname=10581

January 12-25, 2003, The Panama News, Coalition for Tax Competition praises Bush tax plan but warns about proposed interest reporting rule
http://www.thepanamanews.com/pn/v_09/issue_01/opinion_03.html

January 9, 2003, Tax-News.com, Mixed Reactions To President Bush's Tax-Cutting Plan
http://www.tax-news.com/asp/story/story.asp?storyname=10473

January 6, 2003, Tax-News.com, by Mike Godfrey, US Bankers Again Protest At Planned IRS Interest Reporting Rules
http://www.tax-news.com/asp/story/story.asp?storyname=10436

December 19, 2002, Tax-News.com, by Mike Godfrey, 17 US Congressmen Write To Treasury About Bank Reporting Rules
http://www.tax-news.com/asp/story/story.asp?storyname=10339

December 6, 2002, Tax-News.com, CFP Testifies To IRS Against Interest-Reporting Rules
http://www.tax-news.com/asp/story/story.asp?storyname=10221

News Accounts of IRS Hearing, December 5, 2002
http://archive.freedomandprosperity.org/Articles/irs12-05-02/irs12-05-02.shtml

December 3, 2002, The American Banker, by Laura K. Thompson, Second Thoughts on Second Foreign Deposit Plan by IRS
http://archive.freedomandprosperity.org/Articles/tab12-03-02/tab12-03-02.shtml

November 22, 2002, Tax-News.com, by Mike Godfrey, US Small Business Administration Tilts At IRS Interest Reporting Rule
http://www.tax-news.com/asp/story/story.asp?storyname=10082

November 18, 2002, Bureau of National Affairs, By Alison Bennett, Pressure Builds for IRS to Withdraw Rules On Nonresident Alien Interest Reporting
http://archive.freedomandprosperity.org/update/u11-30-02/u11-30-02.shtml#bna

November 18, 2002, The American Prospect, By Robert S. McIntyre, The Taxonomist: The Tax Cheaters Lobby: How the banking industry and the right foment tax evasion
http://www.prospect.org/print/V13/21/mcintyre-r.html

November 15, 2002, Tax-News.com, US Tax Coalition Attacks IRS Over Interest-Reporting Proposals
http://www.tax-news.com/asp/story/story.asp?storyname=

November 14, 2002, Tax-News.com, US Groups Attack IRS Over NRA Reporting Rules
http://www.tax-news.com/asp/story/story.asp?storyname=9994

November 11, 2002, Tax-News.com, Congressional Committee Chairman Complains Interest Reporting Measure To IRS
http://www.tax-news.com/asp/story/story.asp?storyname=9952

October 4, 2002, Tax-News.com, More Congressional Opposition To IRS Tax Information Proposal
http://www.tax-news.com/asp/story/story.asp?storyname=9590

October 2, 2002, Tax-News.com, US Congressman Writes To IRS On Tax Reporting Measure
http://www.tax-news.com/asp/story/story.asp?storyname=9562

August 21, 2002, Tax-News.com, by Jason Gorringe, Jersey's Finance Centre Disappointed By US Tax Compromise
http://www.tax-news.com/asp/story/story.asp?storyname=9147

August 20, 2002, The Jersey Evening Post, by Christine Herbert, Island hit by US tax blow
http://archive.freedomandprosperity.org/Articles/jep08-20-02/jep08-20-02.shtml

August 6, 2002, The Bureau of National Affairs, Criticism Continues for Narrowed Proposal On Nonresident Alien Interest Reporting
http://archive.freedomandprosperity.org/Articles/bna08-06-02/bna08-06-02.shtml

August 1, 2002, Tax-News.com, by Mike Godfrey, US Treasury Warms Over Clinton-Era Bank Interest Tax Rules
http://www.tax-news.com/asp/story/story.asp?storyname=8951

 

Comments and Information on the Clinton Administration's version of the same proposed regulation

1) CFP's IRS Testimony
2)
Marshall Langer's Comments
3)
Dan Mitchell's Op-ed #1
4) Dan Mitchell's Op-ed #2
5) Veronique de Rugy Op-ed
6)
Letter from Florida Cong. Delegation to Treasury Secretary Paul O'Neill
7) Letter from the Independent Community Bankers of America

1) CFP's IRS Testimony

 Press Release:
http://archive.freedomandprosperity.org/press/p06-21-01/p06-21-01.shtml

Quinlan's full testimony:
http://archive.freedomandprosperity.org/Papers/aq06-21-01/aq06-21-01.shtml

Mitchell's full testimony:
http://archive.freedomandprosperity.org/Papers/dm06-21-01/dm06-21-01.shtml

 

2) Marshall J. Langer: Proposed Interest Reporting Regulations Could Cause Massive Outflow of Funds:
http://archive.freedomandprosperity.org/Articles/tni03-19-01/tni03-19-01.shtml

3) Dan Mitchell's op-ed on the issue (Full Op-ed Link Below):
http://archive.freedomandprosperity.org/Articles/twt02-01-01/twt02-01-01.shtml

4) November 12, 2001, Investor's Business Daily, By Daniel J. Mitchell, Europe's Vassal: IRS Reg Exposes Foreign Investors To Tax Fleecing
http://archive.freedomandprosperity.org/Articles/ibd11-12-01/ibd11-12-01.shtml

5) December 20, 2001, The Washington Times, by Veronique de Rugy, IRS global deposit overreach?
http://www.cato.org/dailys/12-21-01.html

6) Florida Congressional Delegation Speaks Out Against Proposed IRS Regulation

Florida Members of Congress sent a Delegation letter to Treasury Secretary Paul O'Neill asking him to withdraw the proposed regulation requiring all banks located in the United States to report periodically to the Internal Revenue Service the amount of interest paid to nonresident alien individual depositors.

Text of letter

PDF Version

 

7) Letter from the Independent Community Bankers of America

On behalf of the 5,300 members of the Independent Community Bankers of America, we urge you not to allow onerous and punitive new regulations to be adopted that would require reporting of interest paid on deposits of all nonresident alien bank customers. The Internal Revenue Service's proposal for new reporting requirements for nonresident alien deposits would require financial institutions to perform costly new paperwork and procedures that would also result in the flight of core bank deposits from nonresident aliens. (Re: 26 CFR parts 1 and 31: Guidance on Reporting Interest Paid to Nonresident Aliens.) The ICBA opposes this proposal as an unnecessary and costly burden that would impair both financial institutions and their customers.

Text of Letter

 

Return Home

[Home] [Issues] [Tax Competition] [European Union] [IRS NRA Reg] [Corporate Inversions] [QI] [UN Tax Grab] [CF&P Publications] [Press Releases] [E-Mail Updates] [Strategic Memos] [CF&P Foundation] [Foundation Studies] [Coalition for Tax Comp.] [Sign Up for Free Update] [CF&P At-A-Glance] [Contact CF&P] [Grassroots] [Get Involved] [Useful Links] [Search] [Contribute to CF&P]