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Broad Changes to U.S. Withholding Rules Pass the House

House Passage and Next Steps

Proposed tax legislation that would impose significant new withholding and reporting burdens on cross-border payment flows, in an effort to combat tax evasion by U.S. citizens through the use of foreign bank accounts, has moved another step closer to enactment. Initially introduced as a stand alone bill by House Ways and Means Committee Chairman Charles Rangel and Senate Finance Committee Chairman Max Baucus, the proposals were incorporated as a revenue offset in the extenders legislation that passed the House of Representatives on December 9, 2009 (H.R. 4213, the Tax Extenders Act of 2009 (TEA)). TEA currently awaits action by the Senate, which is likely to take up the bill in early 2010.

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