February 11, 2021

Jan/Feb 2021 Updates on DA Tax Advocacy Work

These are updates from the Democrats Abroad Taxation Task Force on our work advocating for relief for Americans abroad from U.S. taxation and financial account reporting. In 2021 we will also carry on our work from 2020 to improve the access of Americans abroad to pandemic aid.

EIP2 - $600 pandemic aid payments for eligible Americans

As you will know by now, in the last days of 2020 Congress passed a $2.3T coronavirus relief package that includes a $600 payment to eligible individuals, being referred to as EIP2 (Economic Impact Payment 2). We refer you to this information published by the IRS about the benefits and how to access them.  There is also information here for self-employed citizens about tax credits for time away from work due to the pandemic.

16 February 2021 - IRS announces all EIPs/stimulus payments have been issued

On 16 February 2021 the IRS published an important update on the pandemic stimulus payments (the March 2020 stimulus payment, EIP1, which was $1200 and the December 2020 stimulus payment, EIP2, which was $600).  It announced that all payments have now been issued and those eligible to receive a payment who have not can claim the payment as a credit in their 2020 tax filing.  Democrats Abroad has published details from the IRS statement here along with further comments on the IRS advice.

How to cash a USG stimulus check

Democrats Abroad continues to receive requests for advice from Americans abroad about how to cash a U.S. government EIP check from outside the U.S. We have prepared this information about how to cash a U.S. Government stimulus check that we believe includes a solution for most circumstances.   There is also this advice from the IRS about how to chase a missing EIP1 or EIP2 check for those who are expecting one based on advice in the Get My Payment system.

DA Webinar to address other questions about pandemic aid

On January 13, 2021 Democrats Abroad hosted a webinar for those seeking more information about the $600 EIP2 (eligibility, etc). This is a link to a recording of the webinar.

Submission on Tax Reform for Americans Abroad to Biden-Harris Transition Team

Between election day and the inauguration Democrats Abroad was invited to meet with members of the Biden-Harris Transition Team tasked with preparing briefing materials for in-coming officials about current issues.  We had a short but productive meeting canvassing the tax and banking issues faced by the Americans abroad community. Further, we made this submission that we understand has been included in the briefing binders presented to Biden Administration Treasury officials.  It's not possible to know at this point how amenable the new team at Treasury will be to our reform recommendations, but we are pleased to have had this opportunity to present and that those we presented to now have roles in the Treasury, which gives us some wonderful contacts in the DOT to follow up with.

American Rescue Plan

President Biden announced his emergency plan to help Americans through the pandemic in the days before he was sworn into office. This reporting on the American Rescue Plan was published as the plan was announced and it is still about the best description of what is in the plan.

Important:  The Plan includes a $1,400 EIP3.  Republicans proposed lowering the income eligibility threshold by $25,000, which would make fewer Americans eligible for the aid. For the moment it looks likely the threshold will remain where it was for EIP1 and EIP2.

The Tax Task Force has been paying close attention to work by the House Ways and Means Committee on the bill, anticipating that it may include some of the tax reforms the Biden campaign had proposed. These include changes to the Global Intangible Low Tax Income (GILTI) tax which impacts many Americans abroad who own companies registered abroad. We are in contact with our friends in Congress who serve on this Committee and who understand the serious adverse consequences GILTI has had for Americans abroad impacted by it.  We will report out any developments.

2021 Non-Resident Taxpayer Qualitative Research Project

Followers of the Democrats Abroad tax advocacy work know that we practice research-based advocacy. We have published 5 major research studies since 2012 and use them to make the case to members of Congress for: a switch to Residency Based Taxation: FATCA and FBAR reform; improvements to COVID aid delivery; WEP repeal; relief from the TCJA transition taxes; and more.

Over the next few months Democrats Abroad is undertaking a qualitative study to explore and document how Americans abroad feel about U.S. taxation and foreign financial account reporting. Our ambition is to produce a profile of Americans abroad that:

1) demonstrates the diversity of the Americans abroad community - and erodes the apocryphal stereotype that we are predominantly of high income and high net worth (which is so detrimental to our advocacy work); and

2) describes the personal and financial impact of U.S. tax policy on the Americans abroad in the voices of those whose situations are indicative of the serious challenges we face.

We anticipate publishing the research in the first half of this year and expect it will add an important new component to our advocacy.

Congressional outreach

In the meantime we continue to remain in contact with our friends in Congress and especially those on the tax writing committees and subcommittees. We continue to educate them on our issues and reform recommendations.

We also raise other issues with them, such as certain lapses in some consular services that have occurred during the pandemic lockdown. Our friends on Capitol Hill have been particularly effective in getting answers to questions posed to government departments through the Congressional liaisons. For example, we are currently inquiring about the availability of COVID-10 vaccines for Americans abroad. Upon request from our friends on the Hill, the Congressional liaison to the State Department is investigating this issue for us.  We will report back when we have had a response.

We expect to publish a Congressional outreach campaign guide for our grassroots activists in the coming weeks to use in calling/writing to members about tax reform.  The Biden Administration supports changes to the 2017 Tax Cuts and Jobs Act and we expect to see Congress debate a tax bill this year.  The voices of Americans abroad who want tax reform will be essential to our efforts to push our reforms into that bill.

Also, we join our colleague organizations advocating on behalf of Americans abroad in asking for Congressional hearings into the issues facing Americans abroad.  Aside from tax and banking, these might also include social security (WEP), voting, medicare, immigration, consular services, and more.

Accidentals taking legal action on renunciation fees

In December our friends in the Accidental Americans Association have lodged a lawsuit challenging the citizenship renunciation application fees imposed by the State Department.  Information about their legal action is here.

Please send comments or questions to [email protected].

Democrats Abroad Taxation Task Force