I have read the excerpt above, and it is confusing. Are they saying that if you deposit some money and it earns interest, that the interest income is subject to IRS withholding? I thought that was already the case. Or is it that they now demand the closure of all accounts where people refuse to allow withholding?
When you withdraw money from the account , 20% of the sum withdrawn for international transfer is witheld by your institution.
Witholding by treaty nation banks is supposed to be mandatory.
This is actually not witholding,its confiscation.