ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release May 31, 2001 #01-41
E-mail: [email protected]

ACB URGES WITHDRAWAL OF REPORTING REQUIREMENT

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Editors, Reporters:

America’s Community Bankers has urged the Internal Revenue Service to withdraw a proposal that would require banks to report interest paid to nonresident aliens on IRS Form 1042-S.

In a comment letter, ACB objected to the proposal on several grounds, including that it would unfairly benefit multi-national banks at the expense of community banks because the requirement would not apply to accounts opened at a foreign branch of a U.S. bank.

It appears from the proposal, ACB said, that the information on interest payments to all nonresident aliens would be shared by the IRS with the governments of tax treaty partners. (Currently, only Canadian nationals are subject to the reporting requirement).

ACB said there is a “high likelihood” the proposal will cause U.S. banks “immediate and irreparable harm” because nonresident aliens, fearing reprisals from their governments when banking information is shared, will transfer their accounts to banks in countries providing more confidentiality.

“As a result of IRS sharing of information, their wealth could be expropriated and they, or their families, could be threatened with criminal prosecution, violence or kidnapping from their home countries,” ACB said.

The comment letter is attached.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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