"Drawback to Owning Bearer Bonds" (Money Talk, Nov. 7) would have us believe the usual Internal Revenue Service propaganda that Congress outlawed the tax-free aspects of bearer-bonds in order to eliminate the problem of locating the bondholders on the part of the bond issuers. That is not true.
Congress' intent was for the IRS, not the issuers, to be able to locate the bondholders, and the easiest way to accomplish this was to require that tax-free municipals must be registered bonds.
The IRS is concerned that the purchasers of coupon bonds may not be the ultimate owners of them and/or that they can avoid being included in a decedent's estate.
In order to locate the owners of the currently outstanding multi-billions of bearer bonds, the IRS now requires that those depositing their coupons must furnish their name, address and Social Security number to their bank at the time of each deposit. Said information then becomes instantly available to the IRS.