April 11, 2024

Taxation Task Force Submission for Senate Committee on the Budget Hearing Entitled: Sunny Places for Shady People: Offshore Tax Evasion by the Wealthy and Corporations

Below is a copy of the submission the Democrats Abroad Global Taxation Task Force submitted to the Senate Committee on the Budget on the Hearing Entitled: Sunny Places for Shady People: Offshore Tax Evasion by the Wealthy and Corporations that took place on April 11, 2024.

Click here to download a pdf of DA's submission to the Senate Budget Committee in full.


Dear Chairman Whitehouse, Ranking Member Grassley, and Members of the Committee:

While FATCA is a well-intentioned tool to reign in offshore tax evasion, Americans abroad have become collateral damage due to the underlying policy of citizenship-based taxation. Research confirms that the majority of Americans living abroad are low to middle-income, live in high-tax countries, and move abroad for work, family, or school. Americans abroad are not “fat cats.” We are overwhelmingly ordinary individuals with underwhelming bank account balances, minnows caught in the net intended for the sharks., 

Due to the current tax code, Americans abroad experience:

  • Closure or denial of bank and retirement accounts based on our U.S. citizenship and the extraterritorial nature of the U.S. tax system.
  • A lack of protection due to foreign rulings that concluded that unequal treatment of "U.S. Persons" is legal as a consequence of U.S. tax laws.
  • Drastically increased complexity and cost of tax compliance, even when no tax is actually due.
  • Information reporting penalties that are systematically assessed, disproportionate relative to the sums of money and tax liability involved, and limited in their ability to be appealed.
  • That they are no longer able to afford the cost of compliance, risk of penalties, and limited financial access, leading to the extreme measure of renouncing their U.S. citizenship.
  • A lack of access to low-income tax filing assistance programs available to domestic taxpayers, despite being recognized as an underserved community by the IRS and our unique and higher compliance burdens.

All members of Congress have constituents abroad who are impacted by these issues. We ask committee members to consider our needs when drafting legislation to ensure that innocent Americans abroad are not harmed while ensuring tax cheats pay their fair share. 

We ask Congress to strike a balance among enforcement, financial reporting, and taxpayer rights by adopting a system based on income source and physical residency. We urge Congress and government agencies to work with us in order to bring comprehensive relief to the overlooked and underserved Americans abroad community.


Martha McDevitt-Pugh

International Chair

Democrats Abroad

[email protected]

Rebecca Lammers

Chair, Taxation Task Force

Democrats Abroad

[email protected]