Skip to main content
Article
Set Up for Abduction and Extortion by the IRS: Does the Reporting of Interest Paid on U.S. Bank Deposits Undermine the Government’s Obligation to Avoid Instigating Terrorism by Foreign Criminal Gangs and Drug Cartels?
Texas Hispanic Journal of Law and Policy (2014)
  • Darren Prum
  • Chad Marzen
Abstract

The Internal Revenue Service recently overturned 90 years of United States foreign and tax policy by finalizing and codifying its efforts to report interest income earned at domestic banks for accounts held by nonresident aliens. While the IRS felt its need to collect the data and revenue outweighs concerns raised against the proposal, the rule change has broad ramifications in the areas of tax, commerce, international policy and law, and the war against transnational criminal organizations and terrorism.

This article argues that the rule change has the potential to wreak havoc on a fragile economic recovery by leading to a steep loss of foreign bank deposits within the United States. The rule change will also foreseeably lead to the targeting and kidnapping of nonresident aliens by criminal gangs and drug cartels, who are likely to obtain financial information which could be utilized to target individuals for the purposes of kidnapping, extortion, ransom, and quite possibly, torture. Far from assisting the war on criminal gangs and drug cartels, the rule change will undermine it and likely subject the government of the United States to litigation in domestic courts through the Federal Tort Claims Act and Alien Tort Claims Act. Moreover, the rule change weakens the foreign policy commitment of the United States against torture, deteriorates the United States’ general commitment in the fight against terrorism and drug cartels in the Mexican drug war, and generally weakens international law. For many economic, legal, and moral reasons, the article contends IRS’ rule change is the wrong policy choice.

Keywords
  • Internal Revenue Service,
  • IRS,
  • nonresident alien,
  • bank interest,
  • Federal Tort Claims Act,
  • Alien Tort Claims Act,
  • terrorism,
  • torture
Disciplines
Publication Date
Spring 2014
Citation Information
Darren Prum and Chad Marzen. "Set Up for Abduction and Extortion by the IRS: Does the Reporting of Interest Paid on U.S. Bank Deposits Undermine the Government’s Obligation to Avoid Instigating Terrorism by Foreign Criminal Gangs and Drug Cartels?" Texas Hispanic Journal of Law and Policy Vol. 20 Iss. 1 (2014)
Available at: http://works.bepress.com/darren_prum/16/