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Washington (August 1, 2002) -- The Treasury Department has withdrawn January 2001 proposed regulations that would have required reporting to the IRS for bank deposit interest paid to all nonresident aliens, and issued new proposed regulations that will require reporting on a more limited basis.Under the proposed regulations, interest on bank deposits would be reported to the IRS only for nonresident aliens who are residents of certain specified countries. The specified countries are Australia, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, and the United Kingdom. Existing regulations require similar reporting with respect to residents of Canada.
"The prior proposed regulations were roundly criticized as being overly broad," stated Pam Olson, Acting Assistant Secretary for Tax Policy. "We have taken the concerns expressed very seriously. The new proposed regulations are carefully tailored to facilitate the goals of ensuring compliance with U.S. tax laws by permitting appropriate information exchange in appropriate circumstances without unduly burdening U.S. banks."
The regulation is being issued in proposed form, which will provide affected parties an opportunity to comment before it is finalized.
-- Electronic Accountant Newswire staff
