By Jay Heflin - 03/18/10 01:08 PM EDT
President Obama on Thursday is expected to sign into law the $17 billion HIRE Act that passed the Senate on Wednesday.
Aside from providing businesses tax incentives to hire and keep workers on the books, the bill also expands the types of entities that must comply with IRS reporting rules on foreign accounts.
Hedge funds, private equity funds as well as fund managers located in the U.S. must either disclose foreign account holdings or face a 30 percent withholding tax. This new requirement will likely get pushback from financial firm leaders, who will seek to ensure that regulators do not make the law too onerous. Treasury has broad authority in creating the regulation.
"Securities industry representatives have voted concerns that the HIRE Act will necessitate costly reporting systems that will be extremely difficult to implement," said Jim Hamilton, Principal Securities Law Analyst at CCH, in prepared remarks. "It addition, reporting systems may run afoul of foreign data-protection and privacy laws."