Republicans Vow To Fight NRA Reporting Regulations

by Carla Johnson, Investors Offshore.com

27 July 2001

The House Ways and Means Committee Chairman, William M. Thomas, said on Wednesday that if the Treasury decides to implement a proposed regulation requiring US banks to report interest payments made to non-resident alien depositors, he will hold hearings on the matter.

At an IRS hearing on June 21st, a number of expert witnesses strongly criticised the proposals, stating that the regulations should be withdrawn, as the costs in both time and resources would greatly outweigh the benefits, a sentiment which Florida Governor, Jeb Bush, recently echoed in a letter written to Treasury Secretary Paul O' Neill. At the time of the IRS hearing, Lawrence R. Uhlick, from the Institute of International Bankers warned that it would be counterproductive for the country to increase its reporting requirements unless multilateral agreements were put in place to 'diminish the incentives for forum shopping by depositors.'

Florida's congressional delegation shares this fear, and earlier this month warned that over $1.5 trillion in accounts maintained by US institutions are at risk, because if the regulations are finalised, non-resident alien depositors are more likely to move their assets to offshore entities in countries where the reporting requirements are less stringent.

Mr Thomas promised that he would work closely with the Florida delegation in order to ensure that the Treasury understands the full implications of the regulations in their current form.

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