Two banker groups sued the U.S. challenging rules that require financial institutions to report information on accounts held by nonresident aliens that may be shared with 72 foreign governments, Bloomberg News reported yesterday. The Texas Bankers Association and the Florida Bankers Association, in a lawsuit filed yesterday against the Treasury Department and the Internal Revenue Service, said that the rules are discouraging investment in the U.S. by nonresidents who fear their information may be shared with the governments of countries including Egypt, Pakistan and Venezuela. “Security concerns over the potential leakage and abuse of personal asset information from this sweeping international exchange with many countries that have unstable governments and porous law enforcement systems has led many non-resident aliens to withdraw money or transfer money held in interest bearing bank accounts in the United States,” James Butera, a lawyer for the groups, said in the complaint. The regulations, which took effect in January, are part of the government’s efforts to work with other countries on tax evasion. Treasury and the IRS say that the U.S. should ask its banks to report information just as it is requiring overseas banks to provide information on U.S. account holders.
