Banks do not usually deduct income tax on Interest Income they pay out to an account holder. Was the 30% a Penalty they paid for closing their CD Account Early? It it was indeed income tax, they could file a 1040-NR to get that refunded.
The IRS does not require reporting/taxation of US Bank Interest for Non-Residents, unless it is connected with a US trade or business.
Here more Tax Tips for Resident and Non-Resident Aliens and Non-Taxable Interest for Non-Residents.
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