Special Report
Deloitte & Touche/BearStearns hold conference on new IRS Withholding Tax Rules
Glen Wigney, Partner -
Assurance and Advisory Services
In addition to the challenges facing theCayman Islands from the initiatives of the Organization for EconomicCooperation and Development (OECD) and the Financial Action TaskForce (FATF), the new IRS Withholding Tax rules will have a significantimpact on the financial services industry.
This is the opinion, expressed in a press release issued by Deloite& Touche and Bear Stearns. The following is the rest of textof this release:
Financial intermediaries need to understand how the QualifiedIntermediary (QI) process works, who is eligible to become a QI,the costs and benefits of QI status, and what will be requiredof Nonqualified Intermediaries (NQI).
To assist members of the financial industry evaluate the potentialimpact of these new regulations, Deloitte & Touche and BearStearns co-hosted a conference at the Marriott Resort on Monday,October 23rd, 2000. This event was co-chaired by Glen Wigney,Partner - Assurance and Advisory Services at Deloitte & Toucheand Greg Fisher, Associate Director at Bear Stearns.
Glen Wigney is quoted as saying "Deloitte & Touche understandsthe significance of these new rules, the large impact they willhave on the financial services industry in the Cayman Islandsand the importance of keeping everyone informed. We were happyto be able to bring experts in this area down to the Cayman Islandsto share our knowledge and help the financial community in anyway we can. We are currently assisting several clients with theirQI applications and look forward to providing the required complianceaudits in the future. Working together with the global Deloitte& Touche network, we plan on being the local experts regardingthese new rules and their implementation."
Key members of the financial industry were invited to attend thisimportant event, and with over 86 confirmed attendees, the conferencewas viewed as a success.
The speakers included:
Marvin Michelman, National Director, Tax Information ReportingServices for the US Deloitte & Touche practice; Glenn Kessler,Managing Director for Bear Stearns; and Jake Braun, AssociateDirector for Bear Stearns.
Marvin, with over 31 years experience, is an expert on informationreporting and IRS practice and procedure. Prior to joining Deloitte& Touche in 1997, he worked with the Internal Revenue Servicefor 19 years where he served as the Senior Regional Analyst responsiblefor examination and information gathering projects.
Mr. Michelman developed Deloitte & Touche's Tax InformationReporting Evaluation (TIRE) service and was the Chairman of IRPAC(Information Reporting Program Advisory Committee) of the IRSin 1997.
Glenn Kessler is a Managing Director at Bear Stearns. Glenn isresponsible for tax information reporting and withholding, corporateand expatriate taxation. Mr. Kessler is a CPA licensed in NewYork. Glenn has worked for Bear Stearns for the past 13 years.His memberships include: the Securities Industry Association TaxCompliance and Administration Committee, the American Instituteof Certified Public Accountants, the New York State Society ofCertified Public Accountants and the Wall Street Tax Association.
Jake Braun, who is an Associate Director at Bear Stearns, is responsiblefor tax information reporting and withholding. Mr. Braun is anattorney licensed to practice in New York, and specializes inthe U.S. taxation of cross-border investments.
Mr. Wigney also added that, "as the Cayman Islands have yetto be approved by the IRS as a qualified jurisdiction, many localentities have been waiting to move on this issue. Marvin Michelmanstrongly suggested, however, that Cayman businesses begin theprocess of filling out their applications to be qualified intermediariesand informing their investors of the current changes as soon aspossible."
He concluded: "We only have two more months to get readybefore the rules come into effect and we should plan accordinglyassuming that the Caymans will become a qualified jurisdiction."