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CPA Seeks Exemption for Foreign Corporations Under Proposed Regs Requiring Electronic Tax Deposits

SEP. 7, 2010

CPA Seeks Exemption for Foreign Corporations Under Proposed Regs Requiring Electronic Tax Deposits

DATED SEP. 7, 2010
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PUBLIC SUBMISSION

 

 

Docket: IRS-2010-0026

 

Electronic Funds Transfer of Depository Taxes: Public Hearing

 

 

Comment On: IRS-2010-0026-0001

 

Electronic Funds Transfer of Depository Taxes: Public Hearing

 

 

Document: IRS-2010-0026-0020

 

Comment on FR Doc # 2010-20737

 

Submitter Information

 

 

Name: Max Legg

 

 

Address:

 

Moss Adams LLP

 

2200 Rimland Dr. #300

 

Bellingham, WA, 98226

 

Email: max.legg@mossadams.com

 

 

Phone: 360-676-1920

 

 

Fax: 360-671-5411

 

 

Organization: Moss Adams LLP

 

General Comment

 

 

Dear Sirs or Madames,

I am a CPA and am concerned about the proposed rule to eliminate the deposit procedure currently available using Form 8109 and requiring foreign corporations to use the EFTPS system to deposit income taxes starting January 1, 2011. My concern is not with the rules themselves, per se, but with a very practical problem that foreign corporations face in regularly being denied the ability to set up a bank account with a US banking institution.

My recent experience shows that US banks are reluctant to open a US bank account for a foreign corporation for fear of being out of compliance with Patriot Act regulations. Without the ability to open a US bank account in the first place, a foreign corporation will not be able to comply with the proposed EFTPS rules.

Let me provide a very specific example of a problem I've encountered. I have a new client that is a corporation from the Netherlands that has invested as a partner in a California partnership. The Dutch corporation currently has no US bank account. It is anticipated that the Dutch corporation will require a US bank account to not only pay US expenses but also to pay corporate federal estimated income taxes and taxes with its federal extension. Presently, the corporation has been unable to locate a bank to open a US bank account.

I ask that the proposed rule makers consider this dilemma for foreign corporations and allow the continued use of the Financial Agent deposit process currently available using Form 8109. Otherwise the US banking system in its reluctance to open accounts for foreign corporations will cause a disruption in the receipt of federal tax deposits.

Thank you for considering this request.

Sincerely,

 

 

Max Legg, CPA
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