Proposed elimination of all "bearer" bonds

On Oct 27, 2009, Ways and Means Committee Chairman Rangel, Finance Committee Chairman Baucus, and others introduced the Foreign Account Tax Compliance Act of 2009 (H.R. 3933, S. 1934) (the "Bill") to clamp down on tax evasion and improve taxpayer compliance by giving the IRS new administrative tools... Full description

On Oct 27, 2009, Ways and Means Committee Chairman Rangel, Finance Committee Chairman Baucus, and others introduced the Foreign Account Tax Compliance Act of 2009 (H.R. 3933, S. 1934) (the "Bill") to clamp down on tax evasion and improve taxpayer compliance by giving the IRS new administrative tools to detect, deter and discourage offshore tax abuses. The Bill would force foreign financial institutions, foreign trusts, and foreign corporations to provide information about their US accountholders, grantors, and owners, respectively. Section 102 of the Bill would effectively repeal the existing portfolio interest exemption from US withholding tax for certain foreign-targeted bearer bonds, whether issued by US or foreign borrowers. Both US and foreign issuers would be denied the ability to market and sell bearer bonds anywhere in the world. A foreign issuer who violates the prohibition would be denied a US interest deduction on its bonds.