As each year passes our list of expat tax issues grows. As followers of expat tax matters know, there was nothing good for Americans living abroad in the Tax Cuts and Jobs Act of 2017. Not only did the law fail to address any of the tax problems Americans abroad endure, it also placed a further serious - and for many existential - tax burden on Americans who own small to medium sized businesses overseas. For these reasons you could say 2018 was the most challenging year yet for expat tax reform activists, many of whom invested enormous energy advocating on behalf of the Americans abroad community during the 2017 tax writing process.
This is a run down of the work of the Democrats Abroad Taxation Task Force (“TTF”) in 2018 in advocating for reforms to the Internal Revenue Code to relieve the unfair and unreasonable burden it places on Americans living and working abroad.
- Feb 1 - DA organizes a London panel discussion with Joe Smallhoover of DA France and the DA Taxation Task Force and Charles Bruce of American Citizens Abroad to discuss the 2017 Tax Cuts and Jobs Act and why Residency Based Taxation didn’t make it into the bill. (The seminar was recorded; the recording can be provided upon request.)
- March 1 - DA publishes a compilation of the tax problems plaguing Americans overseas called ‘How to Fix 23 Tax Problems for Americans Abroad with 3 Solutions’
- March grassroots Congressional outreach campaign – In advance of a March DA Congressional Door Knock about expat tax reform DA hosts a campaign for Americans abroad to contact their members of Congress to demand change. A campaign guide was published to provide background, scripts for phone calls and language for written messages.
- March 6-8 – for the first time in 2018 DA goes to Washington DC to educate members of Congress on the problems Americans abroad face with double taxation, FATCA and the two new “Transition Taxes” built into the 2017 Tax Cuts and Jobs Act – the Repatriation Tax and GILTI tax. This “leave behind pack” was distributed on the Hill. This is a summary of those meetings.
- March 12 – Following meetings with members of the Ways and Means Committee and the Senate Finance Committee, DA launches our first grassroots campaign of outreach to Congress specifically about the “Transition Taxes” in the Tax Cuts and Jobs Act to demand an urgent remedy for Americans abroad who own businesses.
- April 2 – There were two important developments in expat taxation. The FATCA lawsuit dismissal and the IRS issued its first set of guidelines on Transition Tax filing extension.
- April 14 – DA submits comments in response to IRS Transition Tax guidelines.
- April 21 – DA publishes a submission to the Senate Finance Committee prior to hearings on the effects of the Tax Cuts and Jobs Act demanding a Transition Tax remedy for Americans abroad.
- April 27 – Ahead of our second Congressional Door Knock about expat tax reform for 2018 DA launches another grassroots campaign for Americans abroad to call their Members of Congress and demand a fix to the Transition taxes as well as support for RBT and a FATCA fix.
- May 2-3 Congressional Door Knock – Democrats Abroad is back on Capitol Hill talking with legislators about tax reform for Americans Abroad. This is a report of those meetings.
- May 8 – DA publishes a detailed Frequently Asked Questions document on Residency Based Taxation - What is it and Why Do We Support It.
- May 15 and May 22 – DA submits statements to House Ways and Means Committee prior to a series of hearings on the Tax Cuts and Jobs Act. This submission was made in association with the May 16th hearing entitled "Hearing Series on Tax Reform: Growing our Economy and Creating Jobs”. This submission was made in association with the May 23rd hearing focusing on the Act and its impact on small businesses.
- May 22 – DA publishes updates to our Frequently Asked Questions document on FATCA and the DA FATCA Reform Campaign.
- May 29 – At the 2018 Democrats Abroad Global Meeting in Tokyo, Japan DA leaders ratified a resolution to call upon the Democratic Party to support a switch to Residency Based Taxation. We expect that resolution to be considered by the Democratic National Committee at their February 2019 meeting.
- May 29 - In a submission to the House Ways and Means Committee DA seeks clarification on the use of Social Security numbers provided on passport applications, especially in the matter of tax enforcement.
- June 1 – The IRS publishes new rules for Transition Tax filing, granting a 12 month reprieve from reporting, allowing us more time to fight for full exemption. This was an important achievement generating critical relief for Americans abroad who own small-medium sized businesses in their countries of residence. DA and others continue to push Americans abroad impacted by the tax to contact their elected representatives about the Transition Tax burden.
- June 15 – International Tax Filing Day Congressional CallStorm – On the deadline for filing taxes from abroad. Americans abroad were strongly encouraged to use our campaign materials to reach out to their elected representatives about the need for expat tax reform.
- July 4 - DA prepares a Fourth of July expat tax advocacy campaign guide for DA Country Committee and DA Local Chapter to include with invitations to July 4th events.
- July 13 - DA publishes a statement in support of Accidental Americans.
- July 18 – DA publishes materials for voter registration events that describe our campaign in support of Residency Based Taxation, including language supporters can use to talk to candidates and elected representatives about the need for a switch from Citizenship Based Taxation to Residency Based Taxation.
- August 1 – Treasury issues more guidelines on the Transition Taxes in the Tax Cuts and Jobs Act. DA encourages small business owners to write to Treasury about how the Transition Taxes are impacting them, publishing a framework for writing an effective submission to Treasury.
- Sept 13 – DA returns to Capitol Hill for the third time in 2018 to speak to Congress about expat tax reform and publishes a campaign guide for Americans abroad to call or write to their elected representatives during the days of our meetings. This is a report on the September 2018 meetings with Congress.
- Sept 21 - Taxation Task Force member Joe Smallhoover joined RO chair Solomon Yue to present at a Residency Based Taxation event in Paris, France sponsored by the American Chamber of Commerce, France.
- Sept 24 – Treasury issues further Transition Tax Guidelines, once more with no relief for Americans abroad; DA updates its campaign guide and once more encourages Americans with small business to submit comments to Treasury and call their members of Congress.
- Oct 4 - DA holds its fourth and last set of expat tax advocacy meetings on Capitol Hill before the 2018 Midterm elections. Our observations are recorded in the “2018 Midterms State of Play” report.
- Oct 19 – Congress adjourns for the 2018 Midterm Elections. DA publishes an update on the tax state of play going into the Midterms.
- Nov 21 – DA publishes a letter to Congressional tax writers demanding Transition Tax relief during the Lame Duck Session of the 115th Congress.
- Dec 7 – DA publishes a letter to Democratic Party Congressional leaders requesting hearings on Americans Abroad issues in the 116th Congress, including expat tax and financial account reporting issues.
- Dec 14 – DA publishes a letter to the House and Senate Democratic co-sponsors of the 2017 Stop Tax Haven Abuse bill stating our support for good faith efforts to end tax evasion and making recommendations for a 2019 bill that not only fights tax evasion but also protects the financial accounts of Americans abroad in their countries of residence.
- Dec 21 – Democrats Abroad joins other Americans abroad advocacy groups in marking a milestone in our expat tax advocacy work - the introduction of H.R. 7358 the Tax Fairness for Americans Abroad Act.
As we have noted, the H.R. 7358 the Tax Fairness for Americans Abroad Act is not perfect, but it will serve as an excellent framework building a Residency Based Taxation bill that provides critical relief for Americans abroad while also protecting the law from abuse by tax cheats and other bad actors.
We look forward to a new year and a new Congress to carry on with our work to enact urgently needed reforms to the way the Internal Revenue Code and other U.S. laws impact Americans living abroad.
The Democrats Abroad Taxation Task Force is deeply indebted to all who follow our work and support it with calls and messages to Congress about the urgent need for expat tax reform. We count on DA leaders of country committees and local chapters to ensure our campaigns and activities are being presented in a timely manner to the rank and file members of Democrats Abroad. We especially thank the DA leaders who put in time and effort planning and executing all the many successful Tax events in chapters around the globe. We look forward to your continued engagement in 2019.
We sincerely thank the Democrats Abroad International Executive Committee for their support for our many written submissions to Congress and others, which are often presented with very little or no advance notice and with demands for urgent turn-around. Thanks for your comments and support with these important advocacy instruments!
We thank these fabulous DA members and leaders who travelled to Washington DC at their own expense to join us in 2018 for tax advocacy meetings on Capitol Hill: Bing Gelman, Jeffrey Cheng, Connie Borde, Ken Sherman, Tim Lawler, Julian Becker, Becca Young, Martha McDevitt-Pugh and David Miller. Also attending Door Knocks this year were DA Tax Task Force members DeeDee Gierow, Rebecca Lammers, Carmelan Polce and Joe Smallhoover. Special thanks to Chip Seward of DA France and Washington DC who not only joins us on all our Congressional Door Knocks but also makes himself available at a moment’s notice to hand-deliver DA tax advocacy letters and submissions to offices on Capitol Hill. We are so grateful to Chip and we welcome him to the Task Force for 2019.
Best wishes to us all for continued advancement in 2019 in our work to reform the U.S. tax system and bring tax fairness and relief to the Americans abroad community.
DEMOCRATS ABROAD TAXATION TASK FORCE (2018)
Julia Bryan – ex officio (Czech Republic)
Jennifer Cederwalls (Sweden)
DeeDee Geirow (Sweden)
Rebecca Lammers (UK)
Carmelan Polce – Chair (New York and Australia)
Michael Ramos (Australia)
Joe Smallhoover (France)
Orlando Vidal (UAE)