WASHINGTON-The Treasury Department will consider reducing the burden associated with its proposed guidance requiring financial institutions to report deposit interest paid to all nonresident alien individuals. Currently, this only needs to be completed for those claiming to be Canadian. CUNA Associate General Counsel Mary Dunn represented credit unions at a recent hearing held by the Internal Revenue Service (IRS), testifying in opposition to the guidance because of the undue burden it would cause. According to Dunn, the burdens far outweighed the uses of the information. Under the proposal, financial institutions would have to report on all foreign nationals, including those from nations the U.S. does not have tax treaties with. Their reasoning behind the new regulation is the IRS believes it would keep U.S. citizens from claiming foreign status falsely and it will ease information sharing with nations that the U.S. has tax treaties or agreements.
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