Geithner Addresses Lawmaker's Concerns About Security of Nonresident Aliens' Tax Information

Thank you for your recent letter regarding the final regulations requiring the reporting of interest paid on deposits held by nonresident aliens (the "bank deposit regulations").

Your letter requests assurances regarding the policy of the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) with respect to the implementation of the bank deposit regulations. I assure you that the policy of the Treasury Department and the IRS is that the IRS will not share information collected under the bank deposit regulations with another country unless all of the conditions described in your letter are satisfied. Under the Internal Revenue Code, the IRS may exchange tax information with another country only pursuant to the terms of a tax treaty or a tax information exchange agreement. These agreements require the receiving country to keep the information confidential, to use the information solely for purposes of administering and enforcing its tax laws, and to be willing and able to reciprocate by sending similar information to the IRS. Moreover, the Treasury Department and the IRS take very seriously the security of nonresident depositors' tax information and will not share tax information with another country absent a determination that the recipient country has sufficient safeguards in place to ensure the proper use of the information and to protect its confidentiality.

Your letter also requests confirmation of your understanding of the consequences of the bank deposit regulations for Venezuelan residents holding deposit accounts at U.S. financial institutions. While the United States has an income tax treaty with Venezuela, Venezuela currently does not satisfy the requirements described above, and in your letter, for exchange of information under the treaty. Accordingly, the United States does not, and has no plans to, exchange information with Venezuela, including information collected pursuant to the bank deposit regulations.

I hope this information is helpful. Please contact me if I can be of further assistance.