Alex Jones, a U$.$S$.$ citizen, moved to Bermuda $10$ years ago and he has resided there ever since and has no intention of returning to the United States. Alex enjoys his Bermuda residence status but continues to maintain his U$.$S$.$ citizenship for safety purposes and peace of mind. A few years ago, when Alex started his travel agency business in Bermuda, Alex borrowed $$1,000,000$ from his college friend, Vincente, who is a U$.$S$.$ income tax nonresident alien and Alex pays Vicente $6\%$ interest annually or $$60,000$ a year. Vicente will not be subject to a flat or gross $30\%$ U$.$S$.$ income tax on his interest income and Alex will not have to withhold that tax and timely pay it to the Internal Revenue Service with the appropriate form.