Washington, DC – Today, Oversight Subcommittee Chairman Charles Boustany (R-LA) called on Treasury Secretary Timothy Geithner to suspend the proposed Internal Revenue Service (IRS) regulation that would require banks to disclose interest paid to nonresident aliens. In a letter to Secretary Geithner, Boustany wrote that if implemented, the regulation would potentially drive foreign investments out of our economy, hurting individuals and small businesses.
This is not the first time the IRS has attempted to issue this regulation. At the close of the Clinton Administration, the IRS tried to put in place similar reporting requirements.
However, after members of Congress, the Federal Deposit Insurance Corporation, and the U.S. Small Business Administration raised strong concerns, the proposal was eventually withdrawn.
Boustany formally requested the IRS halt its actions and provide additional information that would justify IRS’s authority and policy objectives regarding this matter. In addition to asking for a cost-benefit analysis of the proposed regulation, he requested the agency answer several important questions by October 11, 2011. Those include:
- “Has the IRS considered the administrative burden of this proposed regulation on U.S. banks? If so, how is this burden outweighed by the IRS’s policy goals?
- “Agencies must conduct a cost-benefit analysis of all “significant regulatory action” under Executive Order 12866, which include regulations that have “an annual effect on the economy of $100 million or more or adversely affect in a material way… a sector of the economy.” Provide all correspondence and other documents relating to the proposed regulation and its “significant regulatory action” status;
- “How does IRS plan to implement this regulation? In your answer, please include:
- How the IRS plans to share information collected under this regulation with foreign countries; and
- The annual costs to IRS both in dollars and full-time employees of this new regulation.”
Click here to read the letter in its entirety.