Opposition To IRS Reporting Regulation Intensifies

by Glen Shapiro, LawAndTax-News.com, New York

23 October 2003

US think tank, the Center for Freedom and Prosperity announced this week that bipartisan opposition to the proposed Internal Revenue Service (IRS) interest reporting regulation (REG 133254-02) is still strong.

The CFP revealed that in a letter sent to Treasury Secretary John Snow last month, ten members of the Senate Banking Committee urged Mr Snow to withdraw the regulation, and to ensure that the US position on this issue is known to other OECD member states.

The Senators warned that the proposed regulation is likely to drive foreign investment from the United States, that it violates the intent of Congress "which has consistently voted in the past to reject the taxation of interest income on foreign investment or reporting of such income", and that it violates the Regulatory Flexibility Act.

They continued:

"More broadly, we believe the proposed rule will help undermine the lower tax/economic growth policies of President Bush. We have all worked tirelessly together in passing the President's economic growth package, and our message to the world should be to follow our lead in cutting taxes and making our tax code and regulatory system more efficient and competitive."

"The implementation of this rule will discourage the free flight of capital around the world and remove one of the few incentives governments around the world have not to impose excessive taxes on their people. We do not believe the US should be a party to that effort."

The letter concluded: "We again urge that you withdraw this rule as soon as possible and make that position clear in the upcoming OECD meeting in Paris in which Treasury will represent the US and President Bush."

Recommended