Tax Writers' Bill Targets Use of Foreign Banks to Evade U.S. Taxes

 The chairmen of the Senate Finance and House Ways and Means committees join other top tax writers in unveiling broad legislation (H.R. 3933, S. 1934) targeting the use of foreign banks and other entities to hide assets offshore and evade U.S. taxes. The measures are intended to force foreign financial institutions, trusts, and corporations to provide information about their U.S. account holders. A cornerstone provision is a 30 percent withholding tax on payments to foreign banks unless they acknowledge the accounts to IRS. “This bill offers foreign banks a simple choice—if you wish to access our capital markets, you have to report on U.S. account holders,” Ways and Means Chairman Rangel says.