From: David Melnik
Dear Merri and Gary:
I think your subscribers should be aware of, there is a new U.S. withholding tax regulation that comes into effect on January 1, 2001. It essentially requires foreign institutions who are dealing with U.S. citizens to confirm that U.S. citizens have filed a form W-9 called “Request for Taxpayer Identification Number and Certification”.
If the foreign institutions don't receive permission to do this from their American clients, they must hold back a 31% tax on the CAPITAL of all U.S. securities. Pretty heavy stuff.
This is something that Americans that have offshore accounts should be aware of. If the American taxpayer does wish to provide this information and does not want to have the 31% withholding tax levied on his assets, then the assets have to be changed to other securities of a non-U.S. nature.