by Mike Vogel
The IRS now requires financial institutions to report interest paid to non-resident alien (NRA) depositors. Many international banks operating in Florida had opposed the regulation, arguing that their clients would withdraw their money if the governments in their home countries were informed of where they had deposited their money. Florida Trend asked international bankers how the new regulation will affect international banking in Florida.
“We believe that the impact will be minimal. The information that will be reported to the IRS may only be shared by the U.S. with countries with whom the U.S. has a treaty to exchange such information, and the expectation is that such information is protected by local privacy laws. That is not to say that some customers will not feel comfortable with such arrangements and may move their funds outside the U.S. We believe that how the U.S. financial institutions inform and educate their customer base regarding the implications of the NRA rule will be key in determining how many customers may close their accounts at the bank. ”