Taxation Task Force Chair

  • posted about DA publishes updates to our FATCA /FATCA Reform Campaign FAQs on Facebook 2018-05-22 06:44:04 -0400
    DA publishes updates to our FATCA /FATCA Reform Campaign FAQs

    DA publishes updates to our FATCA /FATCA Reform Campaign FAQs

    This is a link to our FATCA and FATCA reform campaign FAQs, updated for developments in our campaign in support of Residency Backed Taxation and other.  

    Please send questions or comments to taxationtf@democratsabroad.org.


  • DA tells House W&MComm American business owners abroad need a TC&JA "transition taxes" exemption

    The Ways & Means Committee of the U.S. House of Representatives is holding a hearing on Wednesday May 16, 2018 entitled "Hearing Series on Tax Reform:  Growing our Economy and Creating Jobs".  You can find more information about it here.

    Democrats Abroad has prepared this submission to the hearing, outlining our concerns about the "transition taxes" introduced in the 2017 Tax Cuts and Jobs Act, profiling comments from American business owners abroad who are being hurt by the new taxes and demanding this urgent remedy:

    "We believe Americans overseas with interests in foreign corporations should be exempt from the Repatriation Tax and from the GILTI Tax regime for any given year so long as:

    (1) they meet the conditions required for exemption under IRC Section 911, and

    (2) they are individual U.S. Shareholders.

    This solution both achieves the U.S. Congress's goal of capturing corporate tax it has been long-denied, and recognizes that the profits of businesses owned by Americans living abroad were never meant to be repatriated to the U.S. because they are needed to sustain the underlying business entities and the American expatriate families who rely upon them.

    We strongly urge Congress to correct this unintended tax burden which harms Americans and their opportunities for personal savings and economic growth. American business owners abroad should be exempted from these transition taxes so they can remain positioned to manage and grow their businesses and take care of their families."

    We urge you to read the whole of our submission and follow these instructions to make your own submission to the hearing, especially if you are the owner of a Controlled Foreign Corporation and will be impacted by the Act.

    Please send questions or comments to the Democrats Abroad Taxation Task Force at taxationtf@democratsabroad.org


  • posted about Residency Based Taxation - what is it and why do we support it (updated FAQs) on Facebook 2018-05-08 13:21:48 -0400
    Residency Based Taxation - what is it and why Democrats abroad support it. Updated FAQs

    Residency Based Taxation - what is it and why do we support it (updated FAQs)

    Thanks to everyone who has contributed to our campaign in support of a switch from our current system of Citizenship Based Taxation to Residency Based Taxation by calling, message or writing to Congress.  If you have yet to do so, or feel compelled to reach out to your elected representatives again, this guide has all the information you need.

    If you're not sure what Residency Based Taxation is and so are not sure whether you should act in support of this campaign then we encourage you to examine our Residency Based Taxation Frequently Asked Questions And if you still have questions please contact us at TaxationTF@democratsabroad.org.

    Our campaign in support of an urgent remedy for American business owners abroad who face TWO NEW TAXES because of the 2017 Tax Cuts and Jobs Act carries on.  This was a horrific drafting error made because of the extreme haste with which Congressional Republicans drafted and passed the 2017 tax law.  Our discussions with Congress the first week of May suggests the law contains HUNDREDS of such errors!  We need as many voices as possible drawing attention to this one so that, should the Republicans get their act together and introduce a "corrections bill" to make these many fixes, that an exemption for Americans abroad from these crushing new taxes is included.  Whether you are the owner of a controlled foreign corporation or not, please click here to send a message to lawmakers and regulators who can implement a fix.

    You can sign up for regular updates from the DA Taxation Task Force here.


  • posted about DA is in DC talking tax reform. Time to call Congress! on Facebook 2018-05-01 07:41:01 -0400
    DA is in DC talking tax reform. Time to call Congress!

    DA is in DC talking tax reform. Time to call Congress!

    DA is door knocking Congress this week to demand urgent reforms to the ways the U.S. tax system harms Americans abroad.  It is critical for Congressional offices to be hearing from Americans living abroad right now to back up our message.

    Download this Guide which has all the information you need to call, message or write to your elected representatives about the urgent need for tax reform for Americans abroad.  

    We need a "storm" of calls to rain down on Capitol Hill to make a difference.  Please make your calls to your Senators and member of the House of Representatives and share this other Americans abroad.  And then request your ballot for the 2018 midterm elections.  

    Please send questions or comments to TaxationTF@democratsabroad.org.


  • posted about Call Congress and talk tax reform on Facebook 2018-04-27 09:17:20 -0400
    DA on Capitol Hill next week to talk tax reform. Back us up! Call Congress next week.

    Call Congress to talk tax reform

    We now understand the extent of the financial horror of the 2017 Tax Cuts and Jobs Act for Americans abroad who own businesses. The two new “transition taxes” they will bear will force many to close the companies that they have worked so hard to build and which sustain their families and prepare them for financial security in retirement. A true tax tragedy. And another call to arms for the Americans abroad community to demand that Congress:

    • find a “transition tax” remedy to prevent the destruction of many thousand of businesses owned by Americans living abroad;
    • work with the members of Congress developing a Residency Based Taxation proposal;
    • co-sponsor HR 2136, the “Overseas Financial Access Act” – to eliminate the foreign financial accounts of Americans living abroad from reporting under FATCA;
    • co-sponsor HR 1205, the “Social Security Fairness Act” - to repeal the Windfall Elimination Provision that prevents Americans abroad with pensions in their countries of residence from claiming the full amount of Social Security payments owed to them;
    • address the needs of Accidental Americans who want only to shed unwanted U.S. citizenship without lengthy procedures and undo penalties.

    Democrats Abroad needs you to back up our efforts by calling your elected representatives and demanding tax reform for Americans abroad.

    Download our Guide with everything you need to call, message and write to Congress


  • posted about DA tells Senate Finance Committee that we need a Transition Tax remedy urgently on Facebook 2018-04-22 14:46:59 -0400
    DA tells Senate Finance Committee that we need a Transition Tax remedy urgently

    DA tells Senate Finance Committee that we need a Transition Tax remedy urgently

    The Senate Finance Committee is holding a hearing this week to examine the early stage impacts of the 2017 Tax Cuts and Jobs Act.  Democrats Abroad has made the attached submission to the Committee to register our serious concerns about the new Transition Taxes in the law which have extremely severe financial penalties for Americans abroad who own businesses.  Please see our letter below.

    This is a link to the livestream broadcast of this important Senate Finance Committee hearing: https://www.finance.senate.gov/hearings/early-impressions-of-the-new-tax-law

    You will also find at this link directions to making your own submission on the topic of the new tax law. Submissions are due no later than Tuesday May 8 and can only be forwarded by post. No faxes or emails accepted. Please take this into consideration if you are mailing a submission from abroad.

    Democrats Abroad Taxation Task Force  - taxationtf@democratsabroad.org


    Democrats Abroad

    P.O. Box 15130

    Washington DC 20003

    DemocratsAbroad.org

    Senator Orrin Hatch, Chairman

    Senator Ron Wyden, Ranking Member

    Senate Committee on Finance
    Attn. Editorial and Document Section
    Rm. SD-219, Dirksen Senate Office Building
    Washington, DC 20510-6200

    April 20, 2018

    Dear Chairman Hatch, Ranking Member Wyden, and all Members of the Committee,

    Re: Senate Finance Committee Hearing to examine Early Impressions of the New Tax Law – Tuesday, April 24, 2018

    Democrats Abroad greatly appreciates this important hearing on the early impressions of the Tax Cuts and Jobs Act (P.L. 115-97) and we respectfully request that you accept this report for inclusion in the hearing record. We join other organizations representing Americans living abroad in our serious concern about the impact that new taxes in the Tax Cuts and Jobs Act will have on non-resident Americans who own businesses abroad.

    In 2017 the U.S. Congress included Territorial Taxation for Corporations (TTC) in the group of reforms built into the Tax Cuts and Jobs Act (TCJA). We understand that TTC was implemented in order to help level the international tax playing field for U.S. multinational corporations. Congress also included in the TCJA two new “transition tax” provisions to capture tax on corporate profits long kept out of reach of the U.S. Treasury. These new “transition taxes” are our key concern because they materially threaten the viability of businesses owned by Americans living abroad.

    The TCJA “Transition Taxes”

    15.5% Repatriation Tax - imposed on undistributed (and therefore untaxed by the U.S.) business profits from 1986 through 2017. Overseas resident American business owners declare those undistributed business profits on their 2017 personal tax filing. This is a retroactive imposition of tax that is unrelated to the realization of revenue that might be used to pay the tax.

    GILTI Tax regime – starting in 2018, mandatory declaration of undistributed business profits on the personal tax filings of business owners abroad, taxed at the highest personal marginal tax rate and without access to two critical offsets afforded corporate owners of businesses abroad: 1) a 50% deduction and 2) credits for taxes already paid on the profits to the business’s jurisdiction of incorporation. Further, as with the Repatriation Tax, the GILTI tax is imposed on profits where there may be no realization of revenue to use to pay the tax.

    Clearly, TTC was enacted to strengthen U.S. multinational corporations. We believe TTC’s “transition tax” provisions were never meant to beleaguer ordinary, hard-working Americans living and owning companies abroad. In truth, the Repatriation Tax and the GILTI Tax regime will have an enormously harmful financial impact on the estimated 1 million non-resident Americans who own businesses abroad.[1]

    Transaction Tax impacts on non-resident Americans who own businesses abroad

    Americans living abroad owning and operating businesses are an exceeding diverse group; they are architects, yoga studio owners, retailers, recruiters, beekeepers, IT professionals, film and television producers, music distributors, advertising agency owners, financial service providers and more.[2] When asked in early 2018 about the impact of the TCJA “transition taxes” on their enterprises expat American owners of businesses in their countries of residence provided the following comments:

    My family and I own a small private property development company based in the UK and operating since 2001. The profits of this company are fully taxed in the UK and none of the proceeds have been repatriated to the US as they are used for the continuing financing of the business.

    Massachusetts voter living in the UK

    I am a widow, mother of 2 children (ages 16 and 22). My husband was a Canadian glass artist he did not have a pension. I am and have been a self employed graphic designer for many years. I have no pension. My corporation is just me. It holds my savings which are now being taken away by this tax.

    Wisconsin voter living in Canada

    I operate my company with just myself and my spouse and make minimal profit ($20,000 PA at the most after all UK taxes have been paid) and most recently a loss, none the less I file my US taxes at a cost of $1000 each time and now I find I might be hit with an extra US tax making my company potentially nonviable.

    American living in the UK

    I run a technology company from Hong Kong with offices in three territories (China, HK and Taiwan). We have 10 employees and are an exceedingly small company who struggle every day to meet bills and grow our company. But we have big dreams and want to succeed. Don't snuff out small business owners like myself. We are the past, present and future of American business both at home and abroad.

    New Jersey voter living in Hong Kong

    As an architect, I established my small office of 6 employees as a Professional Corporation. This means that the US government is attempting to take a percentage of my savings, which will be needed to weather downturns in the market, which greatly affects my ability to retain employees and keep my business open. I have no home office in the US, nor is there any way for me to benefit from the large corporation tax breaks. This is simply the US siphoning away the funds I need to keep my business up and running.

    Massachusetts voter living in Canada

    I have been in Canada for several decades, except for 1997-2001 when my wife and I lived and worked in the U.S. For the past 11 years I have been doing IT consulting for the Canadian government, which required having a corporation. I have built up savings within the corporation which are meant for my retirement, and it operates solely within Canada, i.e. not a branch operation of any U.S. company. It was a shock to learn from my accountant that I am facing a tax of about $12,000 on my retained earnings, as a result of the subject legislation.

    North Carolina voter living in Canada

    My family business is a simple IT training and consulting corporation that employs me and my husband only. We file and pay taxes in Australia and the US as required. This new tax can ruin us, and if we were simply living in the US, would not apply to us. This is unfair.

    California voter living in Australia

    I have a little landscaping business with 5 employees. I am very proud of the work we do, but keeping on top of all of the paperwork is a struggle for me. I am happy to pay my fair share of taxes, but this law is not fair.

    California voter living in Canada

    My business is a one person marketing consulting corporation in which I maintain a simple portfolio to save for my retirement. This is a travesty.

    Vermont voter living in Canada

    I am a VERY small business owner, running a private counselling practice out of my home. I am very worried that the new laws will be punitive. I already have to pay a tax accountant more than $600 CDN each year for preparing my US tax returns yearly. My fear is that the increased complexity will not only raise the amount I need to pay them, but will result in my needing to pay taxes twice on the same money.

    Massachusetts voter living in Canada

    My business, REDACTED, is a values based business with a focus on sustainability. We make the best REDACTED in Vancouver, BC and strive to be the best employer in our industry. The livelihood of my family and the 100 staff that REDACTED employs is in danger from this policy mistake.

    Washington state voter living in Canada

    I am a small business person with a trading company and some small service businesses. I declare my businesses and income and pay the taxes due both locally and to the US Treasury. Although I have lived overseas for over 40 years, I am proud to be an American and to support the government with my tax dollars. But this latest abomination of a regime is putting an unbearable burden on me and countless other Americans for little tangible benefit. We’re the small worthless fish being swooped up by a giant drift net meant to catch the larger valuable prey, and we’re being left to suffocate and die for lack of interest. Please help us.

    Wisconsin voter living in Taiwan

    I am a practicing physician. I am shareholder in our small incorporated family owned medical business. This Canadian only corporation serves only local people, and the income from this stays in Canada and is effectively our only pension. The Repatriation/GILT is unfair taxation! We have diligently and without fail filed our US Tax returns all the years that we have been required to do so in addition the Treasury Department forms at excess cost to us.

    California voter living in Canada

    I run a one-person incorporated consulting business. I have worked part-time for the past nine years, with the specific purpose of putting money aside to send my two daughters to college in the US. Any additional penalizing taxes paid out of my corporation will be a direct hit to the tuition funds I have worked hard to save, and result in a higher need for federal financial aid.

    Illinois voter living in Canada

    I am the owner of a small software development business that has never done any business in the U.S., yet still reports to the U.S. IRS, and will continue to do so as long as deemed that the cost is within reason. My options are simply to shut it down or expatriate.

    California voter living in Sweden

    All of these comments, and several more not listed here, demonstrate that many Americans business owners living abroad fear that this additional tax burden will force them to close their businesses[3]. In addition to the new transition tax burden American business owners abroad will bear, they are also being subjected to even greater tax filing/compliance costs. The new rules for calculating the “transition taxes” are exceedingly technical and organizing accurate filings is proving very time-consuming and complex. U.S. expat tax professionals hired to prepare these filings are passing on to American business owners abroad the additional cost of their time and labor, enlarging the financial burden the new TCJA taxes places on the taxpayer.

    Further, while U.S. corporations establish subsidiary businesses abroad in order to expand the operations and profitability of their U.S.-based parent company, U.S. citizens abroad establish businesses in their countries of residence in order to build a life and future abroad.

    These are desperate cries from your constituents for help.

    I set up my business only in June last year (2017) as a stop-gap to enable me to earn consulting fees during a period of unemployment following involuntary redundancy. I am earning a fraction of what I earned when employed (about 75% less), yet I am now faced with the cost of employing a tax preparer to deal with the complexity of earning my small income through a UK limited company that I own rather than through a UK company owned by someone else. On 2017 income of about US$15,000, I expect a bill from a tax preparer in excess of US$2,000, more than 10% of my total income, only to comply with the filing burden placed on me as UK business owner who happens to possess a US passport. I can’t even estimate what the cost will be if any US taxes are owed.

    I have lived outside the United States for nearly 25 years and have filed my tax returns and FinCen and FATCA forms without the assistance of a tax preparer for the last 15 years. Now, at a time when I am on significantly reduced income, I am being penalised for being a US citizen earning money the wrong way.

    Virginia voter living in the UK

    As a simple freelance consultant to the life sciences industry, I only established a British limited company on the request of my corporate clients to ensure compliance with local employment regulations and law. I have no employees and no teams of accountants and finance advisors. Between the transition tax and the small fortune I will spend on tax accountants, my financial position will suffer detrimental damage – not only will I suffer a significant income loss, the reduced income will severely impact my likelihood of being able to re-mortgage my home and potentially force me and my wife to sell our home at a loss. I have been fully compliant with US tax and reporting laws for the 10 years of living overseas – this law however has the potential to financially destroy millions of Americans like myself in a matter of months.

    I beg you, PLEASE PLEASE PLEASE PLEASE PLEASE PLEASE remove innocent overseas US business owners from this broad net of unintended taxation. I believe it was not intended to financially destroy people like me, but it is has the potential to do exactly that.

    Arizona voter living in the UK

    We believe strongly that a remedy is needed to exempt these taxpayers from a potentially crushing new tax liability - one that Congress never intended.

    Transaction Tax Remedy

    We believe Americans overseas with interests in foreign corporations should be exempt from the Repatriation Tax and from the GILTI Tax regime for any given year so long as:

    (1) they meet the conditions required for exemption under IRC Section 911, and

    (2) they are individual U.S. Shareholders.

    This solution both achieves the U.S. Congress's goal of capturing corporate tax it has been long-denied, and recognizes that the profits of businesses owned by Americans living abroad were never meant to be repatriated to the U.S. because they are needed to sustain the underlying business entities and the American expatriate families who rely upon them.

    We strongly urge Congress to correct this unintended tax burden which harms Americans and their opportunities for personal savings and economic growth. American business owners abroad should be exempted from these transition taxes so they can remain positioned to manage and grow their businesses and take care of their families.

    We thank you for considering our views. If you have any questions regarding this letter or would like to discuss the matter further, please do not hesitate to contact either me or Democrats Abroad’s Carmelan Polce who can be reached at Carmelan@democratsabroad.org.

    Sincerely,

    Julia Bryan
    International Chair
    Democrats Abroad
    chair@democratsabroad.org

    Democrats Abroad is the branch of the U.S. Democratic Party for Americans living outside the U.S. Democrats Abroad has members in over 190 countries and official country committees in 53 nations on six continents. Democrats Abroad’s main activity is helping overseas Americans register to vote in U.S. elections. We host our own voter assistance website to aid Americans in that process - www.votefromabroad.org. We often cooperate with U.S. Embassies and Consulates in our countries to encourage voter participation on a non-partisan basis. You can find out more information about us at www.democratsabroad.org or on our Democrats Abroad and Democrats Abroad country committee Facebook pages.

    APPENDIX 1 – Sampling of businesses run by Americans abroad

    I am an architect running a small home based practice with my Canadian spouse.

    New Jersey voter living in Canada

    I co-own a small yoga studio. We offer yoga and meditation classes and struggle to maintain a business in Toronto, Canada's most expensive city.

    Ohio voter living in Canada

    I simply own some souvenir stores in Quebec City.

    Ohio voter living in Canada

    I am a small business, just a one woman Recruitment firm – and a single mother.

    California voter living in Canada

    I am a beekeeper in Canada partnering with my Canadian husband.

    Ohio voter living in Canada

    [I work] as a producer and director of film and television. I am merely an individual artist and creator bringing content to the U.S. and international markets.

    California voter living in Canada

    My business... was established in 1992 and provides distribution services for small, independent music labels. I have lived in London since 1986.

    New York voter living in the UK

    I run a small advertising agency working locally.

    New York voter living in Switzerland

    Psychological assessment and therapy for clients in Calgary, Alberta area. I am the sole owner of my business and sole provider of therapeutic services.

    Oregon voter living in Canada

    The business that my wife and I run, REDACTED, is a company dedicated to helping social enterprises to grow and to increase their positive impact on society and the environment. We employ 15 people, including a number of Americans, in Singapore, where we have lived for the past 14 years.

    New York voter living in Singapore

    I and my siblings own a very small corporation incorporated in Canada created solely for the purpose of splitting a small oil royalty between the eight children. Without the corporation, we would have had to sell the mineral interests because they don't generate enough money, and would have foregone our inheritance.

    Utah voter living in Canada

    APPENDIX 2 – Americans abroad must reconsider plans to start businesses given the new tax burden imposed by the Tax Cuts & Jobs Act.

    I am a stay at home mom, and earn a little money for our family freelancing (writing, editing, and translating) from home. I am hoping to start a small market farm business this year also in Chilliwack, BC, Canada where I live with my husband and two boys.

    Colorado voter living in Canada

    I am currently a student, but planning to go into private practise as a therapist. So I am not a current business owner and the US Tax law may prevent me from operating in private practice as I hope to do.

    California voter living in Canada

    I am an American married to a Dutch national, my “business” is that I am registered as a single-person company: a freelance graphic designer. I have freelanced on and off for several years, whenever I was in-between full time jobs. Currently I am unemployed and do not have any freelance income, these laws have the power to destroy me and my family financially. They limit my prospects for the future… I don’t dare try to grow a business in any way because it will end up hurting my family in the end. I can’t save for my retirement, my child’s education… the American tax laws are devastating to well-meaning citizens overseas that are caught in the unintentional crossfire.

    New York voter living in The Netherlands

    I am a software engineer that works on embedded electronics. I have aspirations to start a small, consulting side company where I may be able to work on my own devices and electronics. Taxes in Denmark are quite high, and I have a large burden on any amount that I may be able to use on my start-up, but adding another tax burden on top of this completely destroys all incentive for me to even start. I am forced to remain a hobbyist that cannot use my engineering expertise outside of my current primary income, with little hope of driving my future career.

    Montana voter living in Denmark



    [1] In 2014 research published by Democrats Abroad approximately 20% of respondents identified themselves as “Self-employed/Business Owner.” Given Department of State estimates that 6.5 million voting age Americans live abroad, we estimate that perhaps a million American citizens are impacted by the “transition taxes” in the Tax Cuts and Jobs Act.

    [2] See Appendix 1 – Sampling of businesses run by Americans abroad.

    [3] Appendix 2 contains comments from Americans living abroad who had planned to start businesses in their countries of residence but who may cancel those plans because of the Transition Taxes.


  • signed up on Tiny Actions Signup 2018-04-06 09:12:27 -0400

  • Important updates on FATCA and on provisions in the Tax Cuts and Jobs Act that impact Americans abroad

    On Monday 2 April there were two important developments related to expat taxation:

    1. Supreme Court denies reviewing FATCA lawsuit

    The Supreme Court announced on Monday 2 April that it will not review the decisions of the lower courts on the FATCA constitutional challenge.  The denial of certiorari means that the issue did not rise to the level, at this time, that merits the Court's review. 

    If the Court had heard the case (Crawford et al v U.S. Treasury) then the question of whether FATCA violates 4th, 5th and 8th Amendment protections of the U.S. Constitution, as well as whether the Intergovernmental Agreements that implement FATCA are enforceable without Senate ratification, would have been addressed.  Many would have welcomed an answer to these questions.  

    However, the Court's decision makes no difference at all to our work advocating for relief for Americans abroad from the enormous burden brought by FATCA.  We continue our support of H.R. 2136 - the Overseas Americans Financial Access Act - which would eliminate all FATCA disclosure of the accounts of Americans living abroad in our countries of residence.  We will continue to ask members of the House to support the bill and encourage our friends in the Senate to introduce a parallel bill.

    2. IRS issues guidance on Transition Tax filing extension

    Further to our recent communications about the imposition of further tax burdens on Americans abroad built into the 2017 Tax Cuts and Jobs Act, on Monday 2 April the IRS issued guidance affirming that 15 June 2018 is the deadline for filing and payments due in relation to the Repatriation Tax for taxpayers with a 15 June filing deadline (as opposed to the 17 April 2018 filing deadline).  This provides some relief for the non-resident owners of businesses abroad who face not only the Repatriation Tax but also a new GILTI tax regime as a result of the switch to a system of Territorial Taxation for Corporations enacted by Congressional Republicans in December.  

    We strongly encourage Americans abroad whose businesses fall under the definition of Controlled Foreign Corporations (consult your accountant or tax advisor) to take part in our grassroots campaign demanding relief from these "transition taxes" for Americans abroad.  Take the time to draft a few sentences that explain how your business will be impacted.  Many businesses abroad will not survive if forced to bear this additional tax burden and Congress needs to hear that.

    Please push this campaign out to your friends and over your social media channels.  The flow of letters has dropped off materially since the campaign was launched 2 weeks ago; this is not the time to let up!  Let's keep up the pressure on lawmakers and regulators.  You can participate in the campaign even if you are not the owner of a business.

    As always, please send any questions or comments to TaxationTF@democratsabroad.org and thank you for your on-going support for our tax advocacy work.

     

    Democratically yours,

    DA TAXATION TASK FORCE

    Julia Bryan - ex-officio (Czech Republic)

    Jennifer Cederwalls (Sweden)

    DeeDee Gierow (Sweden)

    Rebecca Lammers (UK)

    Carmelan Polce - Chair (Australia and New York)

    Michael Ramos (Australia)

    Joe Smallhoover (France)

    Orlando Vidal (UAE)


  • posted about Taxation Task Force - Report of March 2018 Congressional Door Knock on Facebook 2018-03-15 17:38:14 -0400
    Taxation Task Force - Report of March 2018 Congressional Door Knock

    Taxation Task Force - Report of March 2018 Congressional Door Knock

    During the week commencing Monday March 5th, 2018  the Dems Abroad Taxation Task Force led a hardy delegation of Democrats Abroad through the halls of Congress to talk about expat tax reform. Our Leave Behind Pack profiles our discussion agenda nicely.

    So here are our takeaways.

    · Residency Based Taxation – is generating some genuine action! In the office of Rep George Holding (R-NC) we received a short description of an RBT proposal hewn from discussions with a range of Americans abroad organisations. It needs development in order to generate support from, for example, those frightened by the prospect of inadequate anti- tax avoidance provisions. We learned this in subsequent discussions = Congressional reality check! So our work to persuade Congress that RBT is a justified policy shift that can be implemented responsibly has taken yet another step forward.

    · Tax Cuts and Jobs Act transition taxes - the “Repatriation Tax” and the accompanying GILTI Tax regime is being brought to lawmakers’ attention by many frightened and angry business owners abroad, thank goodness. The good news is that, despite the new provisions being exceedingly complex and difficult to explain, the need for a “fix” is well understood. The bad, sad, sorry news is that it is on a long list of TC&JA flaws that will not be fixed in the short term.

    Congress must pass an Omnibus appropriations bill no later than 23 March and the halls of Congress are filled with people pleading for urgent remedies for parts of the law that hurt themselves or their industry. The vast majority will go away empty-handed. But SEE BELOW for what to do next about Repatriation and GILTI Taxes.

    · FATCA Reform – we continue to talk about HR 2136, the “Overseas Americans Financial Access Act” as a remedy for the problems caused by FATCA, whose problems we no longer need to explain. We did, however, find ourselves briefing Congress on the FATCA judicial challenge. Despite Senator Rand Paul being a plaintiff in the lawsuit challenging FATCA on constitutional grounds, awareness of the case, Crawford et al v US Treasury, is very low.

    As you may know from previous Task Force reports, the Crawford plaintiffs have asked the Supreme Court to review the decision of the lower courts to reject the case for lack of standing. The parties have now filed their pleadings to the Supreme Court. You can find them here.

    For the sake of clarity, Democrats Abroad would be pleased for the U.S. Supreme Court to review Crawford et al on its merits and, once and for all, resolve the question of whether FATCA is constitutional in regards to the fourth amendment (unreasonable searches and seizures), fifth amendment (equal protection) and eighth amendment (excessive fines), as well as the Intergovernmental Agreements.

    · WEP repeal – we continue to promote sponsorship of HR1205, the “Social Security Fairness Act” which would eliminate the impact of the Windfall Eliminations Provision (WEP). The law has 176 co-sponsors and robust awareness. We will keep pushing.

    We also keep pushing HR 2710, the act that would establish a Commission on Americans Abroad and perhaps prevent the establishment of laws and regulations that unintentionally hurt Americans abroad. Which brings us back to the newest law that, because of hasty drafting and inadequate consideration, has unintended adverse consequences for some Americans abroad -

    REPATRIATION/GILTI TAX: HURTS BUSINESS OWNERS ABROAD - ACTION REQUIRED!

    Because Congress will not act urgently to enact a remedy, a diverse group of Americans abroad organisations is asking the Treasury/IRS to delay the law’s implementation. If you are a business owner abroad you are encouraged to participate in this grassroots campaign urging Treasury/IRS to issue a Notice that:

    1. Delays Repatriation Tax payment until the IRS issues adequate guidance.

    2. Provides an exemption from the Repatriation/GILTI tax for Section 911 (non-resident) Americans.

    The email-writing campaign outreach is to relevant directors at Treasury and the IRS plus the leaders of the Senate Finance Committee and House Ways and Means Committee. You should also send this message to your elected representatives in both Houses regardless of their committee assignments. Please contact us with any questions.

    BACK TO THE DOOR KNOCK

    We also discussed –

    · Accidental Americans and the need for relief from the tax burdens inherent in renouncing US citizenship.

    · Disenfranchised Americans born abroad – there are still 13 states which deny the UOCOVA right to vote to citizens who are born abroad and have never lived in the state. It shocks me how little concern this raises in many Congressional offices where aides respond that it is an issue that should be taken up with the state.

    · Americans Abroad Caucus – we’re not even certain the caucus has been re-certified in the 115th Congress and it is more than half over! This caucus is suffering from neglect and may need an urgent re-boot.

    A big thank you to Chip Seward, Becca Young, Jeffrey Cheng, Ken Sherman, Connie Borde and Martha McDevitt-Pugh for door knocking Congress with the DA tax team last week. You guys were great!

    A big thank you also to those who contributed to the Door Knock preparation and materials.

    Thanks again to all of who continue to support the work of the Taxation Task Force.

    Please contact us at any time with questions.

    DA Taxation Task Force

    taxationtf@democratsabroad.org

    Julia Bryan - ex officio (Czech Republic)

    Jennifer Cederwall (Sweden)

    DeeDee Gierow (Sweden)

    Rebecca Lammers (UK)

    Carmelan Polce - Chair (Australia and New York)

    Michael Ramos (Australia)

    Joseph Smallhoover (France)

    Orlando Vidal (UAE)


  • How to Fix 23 Tax Problems for Americans Abroad with 3 Solutions

    23_tax_problems_cover.jpg

    Click here for PDF Version

     

    INTRODUCTION

    Democrats Abroad has documented here the scope of tax problems that uniquely impact Americans living abroad. We hope that by profiling the wide range of U.S. tax code and other provisions that have – however unintended – severe adverse consequences for Americans abroad that we might persuade Congress to act on our behalf and resolve them.

    The list includes 23 discrete matters and, to our disappointment, it has recently grown due to provisions in the 2017 Tax Cuts and Jobs Act. As is the case with most of the provisions that vex Americans abroad, the Repatriation Tax and GILTI provisions in the new law were enacted without due consideration for the impact they would have on non-resident filers.

    Other examples include: the financial account reporting provision in the Bank Secrecy Act, which includes exorbitant and out-of proportion penalties for non-compliance and requires updates generally; SEC regulations and the USA PATRIOT Act which make both investing in the U.S. and investing abroad extremely difficult for Americans living abroad without a U.S. address; and the Windfall Eliminations Provision, which unintentionally denies fully entitled Social Security benefits to Americans abroad who have pensions in their country of residence. Saving and investing for the future is extremely difficult for Americans abroad because of these provisions.

    Thus, we are burdened with an unfair, unreasonable and unjust compliance burden that causes financial and personal hardship and that will require remedies across myriad areas of the tax code and other laws, plus within existing U.S. double taxation treaties and the model U.S. tax treaty. We do not believe Congress has the time or political will to implement these remedies and so instead recommend three solutions that would eliminate the problems enumerated herein:

    1. A switch from our current system of Citizenship-Based Taxation to Residency-Based Taxation.
    There is evidence to suggest that Residency-Based Taxation can be implemented on a revenue-neutral basis[1]. A switch from Citizenship-Based Taxation to Residency-Based Taxation would resolve most of the tax problems outlined herein.

    2. A same country exemption for Americans abroad to eliminate FATCA reporting on financial accounts in their country of residence.
    H.R. 2136, the Overseas Americans Financial Access Act would provide Americans abroad from relief from the unintended adverse consequences of the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted to discourage and apprehend those using foreign bank accounts to commit financial crimes and not to cause personal and financial pain to ordinary Americans abroad who use accounts in their countries of residence to pay bills and save for the future.[2]

    3. Replace the Windfall Eliminations Provision with the Social Security Fairness Act (H.R. 2710).
    Filing from abroad alone is inordinately complex and costly. The forms required to declare income generated abroad are highly detailed, preparing them is extremely difficult and it very often requires the support of professional tax return preparers with specialist knowledge of overseas filing.[3] Our recommendations address the filing costs for Americans abroad which far exceeds the costs incurred by U.S. based tax filers.

     

    TAX CODE PROVISIONS THAT DISCRIMINATE AGAINST AMERICANS ABROAD - AND PROPOSED REMEDIES

    In our examination of the provisions in the Internal Revenue Code that govern tax filing and reporting for non-resident Americans we have identified these areas that require remedies in order to address their perhaps unintended but certainly adverse consequences.

    Note: A switch from Citizenship-Based Taxation to Residency-Based Taxation would resolve most of these issues for Americans living abroad.

    1. US Capital Gains Tax Exclusion – harmonization of capital gains treatment for properties owned by citizens living abroad with the treatment of properties owned by citizens living in the US.

    2. Artificial Capital Gains/Losses due to Currency Fluctuations – elimination of artificial capital gains and losses when no currency has been exchanged by allowing the currency of the country of residence to be the functional currency for tax reporting purposes.

    3. Applying foreign credits to NIIT – allow Americans abroad to apply foreign income tax credits in calculating Net Investment Income Tax.

    4. Marital deduction for bequests to foreign surviving spouses – reinstate the marital deduction for bequests to surviving foreign spouses in the calculation of estate tax.

    5. Declaration of foreign long term savings plan income – tax the income from foreign long-term savings plans at the time the money is withdrawn from the plan.

    6. Taxation of welfare payments – tax imposed on foreign government invalidity, unemployment and social welfare payments to disabled and disadvantaged Americans abroad only by the country making the payments, i.e. the country of residence.

    7. Tax-free transfer of foreign retirement plan assets – render tax-free the transfer of assets from foreign retirement plans deemed qualified plans under international tax treaties to retirement plans in the taxpayer’s new country of residence, be it the US or another country.

    8. Revise punitive PFIC rules – For citizens residing abroad revise the punitive Passive Foreign Investment Company rules and reporting requirements that apply to non-US pension plans, foreign mutual funds and other investment savings vehicles that prohibit Americans abroad from using them to save efficiently for retirement.

    9. Taxation of non-US non-qualified pension plans – simplify the reporting structure for non-US, non-qualified pension plans that would alleviate the onerous need for Form 3520 filings for non-employer funded pension schemes.

    10. Reforms to the FEIE and FHE – maintain the Foreign Earned Income Exclusion, merge it with the Foreign Housing Exclusion and eliminate the ceiling. This would completely eliminate double taxation of the earned income of non-resident taxpayers.

    11. Repeal WEP – Replace the Windfall Elimination Provision (WEP) which drastically reduces the Social Security payments owed to Americans also receiving foreign pension payments with the Social Security Fairness Act to restore rightful Social Security payments to Americans abroad.

    12. 15.5% Repatriation Tax – Provide an exemption for small to medium sized business owners from the 15.5% Repatriation Tax. Meant as a tax break for American companies retaining profits abroad, it forces small to medium size business owners to declare profits set aside for future capital investment.

    13. GILTI tax regime - Harmonise the tax treatment of Global Intangible Low Tax Income and Foreign Intangible Direct Income across all types of foreign corporations owned by U.S. persons or entities by giving pass through-type S corporations owned by Americans living abroad access to the same offsets and deductions afforded to C corporations controlled by U.S multinationals.


    IMPROVING TAX FILING AND REPORTING FOR AMERICANS ABROAD

    Although these reforms would lose their importance for most Americans abroad after a switch from Citizenship-Based Taxation to Residency-Based Taxation, they would be enormously helpful for those who do not elect to file as non-resident US citizens for tax purposes.

    14. Optional simplified earnings declaration – provide non-resident taxpayers who owe no US federal income tax with the option of a one-sentence, handwritten or printed declaration of earnings, accompanied by a tax return or assessment from the taxpayer’s country of residence

    15. Expand the criteria for determining the threshold for who has to file – add a provision so that foreign earned income that can be excluded under current rules does not need to be included when determining your gross income for filing purposes.

    16. Make electronic tax return filing possible for non-resident taxpayers declaring foreign tax credits - Allow taxpayers using the free, fillable IRS electronic forms to exclude the attachments eliminating the need for the taxpayer to file the return by post.

    17. Translated IRS publications and forms – provide translated versions of IRS publications and tax forms commonly used by non-resident, non-English speaking US citizens.

    18. Harmonize International Tax Treaties – align all international tax treaties with the US Model Income Tax Convention of November 15, 2006, especially (but not exclusively) as they apply to private pensions, social welfare benefits, annuities, alimony, child support and pension plans.

    19. Promote the Streamline Filing Compliance (Offshore) Procedures (SFCP) – expand awareness of the SFCP, a tax compliance restoration program introduced in 2014 for Americans who non-wilfully are not compliant with their tax filing and reporting obligations.

    20. Improve communication – encourage the IRS to do even more to expand communication with Americans living abroad, starting with the establishment of non-resident taxpayer support hotlines operated by officials schooled in matters unique to non-resident filers and including the reopening of overseas IRS offices and the restoration of offshore services lost due to cuts in IRS funding.

    21. Protect American Citizens Services – ensure that proposed cuts to State Department funding do not result in further reductions in American Citizen Services provided by U.S. consulates and embassies, which often include advice about tax filing deadlines and local tax return services.

    22. Reform the Foreign Account Tax Compliance Act (FATCA) – enact HR 2136 to exempt from FATCA reporting, by both the U.S. citizen abroad and their financial account provider, the financial accounts of law-abiding overseas resident U.S. citizens in their bona fide country of residence.

    23. Reform the Foreign Bank and Financial Accounts Report (FBAR) reporting requirement for U.S. Citizens in their bona fide country of residence – as follows

    o Redress the enormous, out of proportion penalties – civil and criminal – imposed by the IRS for non-willfully neglecting to file forms;

    o Adjust for inflation the $10,000 aggregate threshold amount that triggers a FBAR filing requirement, which has not been adjusted since the Bank Secrecy Act was enacted in 1970;

    o Eliminate the duplication of information disclosed on the FBAR and FATCA reports;

    o Exempt U.S. citizens from reporting foreign financial accounts that are not reportable by financial institutions in their country of residence;

    o Address the vulnerability of FBAR data security inherent in electronic filing; and

    o Remove the burden imposed on filers who are computer illiterate or with no access to computers by eliminating recently introduced mandatory electronic FBAR reporting.

    REGULATIONS CONSTRAINING BANKING, INVESTMENT AND RETIREMENT SAVINGS FOR AMERICANS ABROAD

    Note: A switch from Citizenship-Based Taxation to Residency-Based Taxation would resolve most of these issues for Americans living abroad.

    Investment options for Americans abroad are increasingly limited and fraught. Due to SEC regulations and legislation designed to protect consumers in the market for financial products, a provider of financial fund products must be registered to sell and market their products in a foreign jurisdiction. Although U.S. brokerage firms have over time turned a blind eye to this requirement, more recently, in an atmosphere of increased disclosure and oversight, many have elected to prohibit clients residing abroad from buying U.S. mutual funds in order to avoid the registration requirement. Exchange-Traded Funds are a legal work-around for Americans abroad interested in a mutual fund-type investment exposure, however even Exchange-Traded Funds may not be an option for individuals whose foreign and/or U.S. bank and brokerage accounts have been closed.

    Features of the U.S. tax code impacting investments, savings plans and retirement savings uniquely penalize Americans residing abroad in the following ways:

    · Punitive taxation of retirement savings plans which qualify and are taxed under local laws but are not qualified plans for U.S. tax purposes;

    · Punitive taxation of foreign government sponsored retirement savings plans that are not qualified plans for U.S. tax purposes;

    · Capital gains tax laws that do not take into account currency fluctuations, thereby creating assessable capital gains upon the sale of assets even if no currency was exchanged;

    · The inability to claim the foreign tax credit against taxes owing under the Affordable Care Act, the 3.8% Net Investment Income Tax;

    · Inflexible regulations involving Social Security and Medicare contributions particularly disadvantage (double-tax and other) self-employed Americans abroad.

    · The Windfall Elimination Provision which drastically reduces the Social Security payments owed to Americans also receiving foreign pension payments;

    · The Social Security benefit taxation regime for taxpayers who are Married Filing Separately provides no exclusion for spouses. Americans married to foreign nationals normally file as Married Filing Separately and as such cannot receive the exclusion afforded Americans married to Americans who file jointly;

    · Social Security contributions required of self-employed Americans abroad are taxed (15.5%) even if they are already making contributions to an aged pension contribution scheme in their country of residence;

    · Welfare payments made by foreign governments to Americans who are disabled, unemployed or disadvantaged are subject to US tax though they are normally not taxed abroad.

    U.S. BANKING ALSO CONSTRAINED

    The USA PATRIOT Act, ratified after the terrorist attacks of 9/11, established new “Know Your Customer” rules for US financial institutions. As a result, banks and financial institutions are no longer willing to hold or open accounts for customers whose only address is outside of the United States. This has constrained the banking, saving and investment activities of Americans abroad. A sensible reform would be to exempt American citizens living abroad from this provision even if they have only a non-US address.

     



    [1] https://www.americansabroad.org/files/586/

    [2] https://www.finance.senate.gov/download/att-2-democrats-abroad-2014-fatca-research-report

    [3] https://www.democratsabroad.org/can_we_please_stop_paying_twice_tax_reform_for_americans_abroad

    +

  • signed up on LGBT Signup 2018-01-11 15:17:21 -0500

    LGBT Caucus Signup

    Democrats Abroad is committed to a world where all persons have access to the same rights and benefits, regardless of sexual identity or gender expression.

    STATEMENT OF PURPOSE

    The Democrats Abroad LGBT Caucus is the constituency group for lesbian, gay, bisexual, transgender and intersex members and any Democrat abroad who supports them.

    The goals of the LGBT Caucus reflect the mission of Democrats Abroad to:

    • engage and empower LGBTI Americans living abroad to vote in US elections;
    • provide a platform for Democrats Abroad members, country committees and chapters to advance issues at the heart of the LGBTI community;
    • support Democrats Abroad’s members in issues they face living abroad as LGBTI Americans, such as access to government services and benefits for same-sex spouses and family members, the legacy resulting from past discrimination and Defense of Marriage Act.

    The LGBT Caucus: 

    • supports Democrats Abroad’s country committees and local chapters in organizing activities of interest to the LGBTI community, such as participation in pride events and voter outreach; 
    • disseminates information to Democrats Abroad members and promotes action on issues that affect LGBTI Americans and their families;
    • ensures that the LGBTI perspective is effectively incorporated in all the work of Democrats Abroad, including issues advocacy, communication and GOTV strategy, planning and execution; ensures that issues and policies that impact LGBTI Americans are included in the Democrats Abroad and Democratic Party platforms;
    • takes leadership in Democrats Abroad’s issues advocacy initiatives, including “door knock” visits to elected officials in Washington DC, to ensure that issues that impact LGBTI Americans living abroad and their families are included and addressed by elected representatives;
    • encourages LGBTI members to run for elected leadership roles within Democrats Abroad and fulfill Democrats Abroad’s diversity and affirmative action goals;
    • supports community building among Democrats Abroad’s LGBTI members and allies;
    • promotes Democratic Party candidates who demonstrate commitment to policies that positively impact the lives of LGBTI Americans;
    • supports and engages with Democratic Party LGBTI caucuses build capacity and achieve common goals.
    Sign up

  • signed up on Taxation Task Force Signup 2017-09-06 16:47:38 -0400

    Taxation Task Force Signup

    Click below to receive periodic updates from the Taxation Task Force on our tax advocacy work.  We will message you when there are important updates and developments to report.

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  • Residency Based Taxation - what it is and why Democrats Abroad support it

    Get involved with our campaign for Residency Based Taxation today - join in today

    The US is the only developed nation that taxes its citizens on overseas income earned while they live abroad.  This system is complicated, inefficient, and causes uncertainty for ordinary Americans living outside the US. Democrats Abroad favors Residency Based Taxation because it is a simpler, fairer, and more efficient system.

    Read more

  • Taxation Task Force Report - April, May, June 2017

    It has been a very busy first few months for the Taxation Task Force (TTF).

    • April Congressional action on FATCA was detailed in messages to Leadership. See the first endnote[i] below for a quick summary.
    • At the May 2017 Global Meeting it was announced that the FBAR/FATCA Task Force would be re-structured to take on a broader tax advocacy brief and re-named the Democrats Abroad Taxation Task Force (TTF). We are operating under the terms of a Draft Terms of Reference (TOR) that is awaiting DA Executive Committee approval. I urge those interested in the tax advocacy work of Democrats Abroad to review the document. Comments are welcome.
    • Further, we encourage those interested in better understanding DA’s tax policy positions generally, and the work of the TTF in particular, to examine these slides on Tax and the American Abroad. They were originally published to help Country Committees prepare for gatherings about tax, but have since become an overarching guide to the tax matters that impact Americans living outside the US and the reform recommendations Democrats Abroad has made and continues to make.
    • On May 23rd the TTF launched the DA grassroots campaign in support of Residency Based Taxation, distributed the Residency Based Taxation (or RBT) Campaign in a Box and, in the weeks that followed, reached out to each of your country committee chairs for support in promoting the June 15 RBT Congressional Call Storm. We believe the launch produced thousands of calls, letters, postcards and emails to Congress asking for their support.
    • Since the launch our campaign has drawn scores of comments from members throughout the world, which enabled us to quickly expand the Residency Based Taxation Frequently Asked Questions document initially distributed with the RBT Campaign in a Box. The RBT FAQs are under continuous review and expansion, as it is our key resource for educating our members about RBT, explaining our campaign and addressing concerns about a change from Citizenship-Based Taxation to Residency Based Taxation.
    • We have also produced an RBT pamphlet, suitable for printing on your home printer in either Word or PDF format that we hope you will place on your tables at July 4th functions and celebrations. You may also like to print a“Support Residency Based Taxation for U.S. Citizens” banner. Two banner files are attached to this message. I’m having difficulty posting them, but I hope to get them on to the DA wiki soon. Many thanks to Peter Fischbach of DA Thailand for developing this terrific campaign resource!!
    • Taxation would have to be foremost among the matters considered by the commission that would be established, under the bill re-introduced by Rep. Carolyn Maloney on May 25th, to study how Federal laws and policies affect United States citizens living in foreign countries. Voting from abroad, the Social Security Windfall Eliminations Provision, Medicare Portability and Citizenship Transmission[ii] might also be among the matters the commission would examine. This is Rep. Maloney’s speech introducing the bill. Democrats Abroad continues to support H.R.2137, the Commission on Americans Abroad Act.

    As Resistance Summer moves on we will be very carefully following the work of Congressional Republicans on tax reform and will reach out to leadership with important developments and opportunities for tax activism. Furthermore, we look forward to your support for a new research project that we hope will help demonstrate the grave difficulties US taxation causes for Americans abroad.

    We have already identified for Congress the areas of the Internal Revenue Code that discriminate against Americans abroad. We have described the enormous complexity of reporting overseas income, the high cost of filing with support from a tax advisor, and the stress of (and out-of-proportion penalties for) making a filing error. We believe it would be helpful to bring these matters alive by creating a report with Americans abroad tax filing case studies. It would include the stories of non-resident citizens whose situations profile the range of problems we have been discussing.

    Please look out for more information about this research study, which we hope to publish by the end of September.

    Best wishes for a safe, fun and resistance-filled summer,

    DEMOCRATS ABROAD TAXATION TASK FORCE

    Julia Bryan - ex officio (Czech Republic)

    DeeDee Gierow (Sweden)

    Carmelan Polce - Chair (Singapore)

    Michael Ramos (Australia)

    Joe Smallhoover (France)

    Orlando Vidal (UAE)



    [i] April brought us long-awaited Congressional attention on the unintended adverse impacts of FATCA:

    · On April 24 Americans Abroad Caucus Chair Rep Carolyn Maloney (D-NY) introduced H.R. 2136, the Overseas Americans Financial Access Act (OAFAA) in the House of Representatives. The bill embodies our FATCA reform recommendation, the Same Country Safe Harbor Exemption from FATCA reporting for Americans abroad.

    · On April 25, the House Subcommittee on Government Operations held a hearing into the unintended impacts of FATCA. Although our requests to provide testimony were denied, we made a written submission to the Subcommittee prior to the hearing and a follow up submission with three modifications for improving FATCA. We will continue to follow FATCA developments closely and strongly support H.R. 2136.

    [ii] On 12 June 2017 the Supreme Court issued a new decision on acquired citizenship, striking down, on equal protection grounds, the distinction in INA 309 between the physical presence required for fathers and mothers when the child is born out of wedlock. Previously, if the child was born of an unmarried US mother and non-US father the mother had to demonstrate 1 year of physical presence in the US in order to pass along US citizenship to the child; if the child was born of an unmarried US father and a non-US mother, the father had to demonstrate 10 years of physical presence in the US in order to pass along US citizenship to the child. Following this ruling and until Congress changes the law, the physical presence rule applying for fathers (10 years) will now also apply for mothers. Had the Court instead established the one-year rule for both fathers and mothers there would be greater protection from being born stateless provided to children born abroad with one unmarried US parent.  


  • DemsAbroad Lion City - Residency Based Tax Action Pack

    Democrats Abroad is hosting a global campaign urging Congress to shift from Citizenship Based Taxation to Residency Based Taxation.  We are hoping that hundreds of thousands of Americans living right around the world will raise their voices in unison around June 15th, the tax return deadline for international filers, and demand that the package of tax reforms to be built by the 115th Congress includes a provision that ends mandatory reporting of offshore income by Americans that live outside the United States. 

    We hope this ACTION PACK is useful for you to understand the issue and how to call, write or email your members of Congress asking for their support for Residency Based Taxation.

    What is Residency-Based Taxation?

    • Residency-based taxation (RBT) is a system in which you pay taxes according to the country in which you live, rather than the one in which you are a citizen. This latter system is known as citizen-based taxation (CBT).
    • Every developed nation follows an RBT system, with one notable exception: The United States of America! The main rationale for such a system is that the benefits of U.S. citizenship follow Americans no matter where they live.

    Why is Citizen-Based Taxation a problem for overseas Americans?

    • An estimated nine million U.S. citizens live, for numerous reasons, outside the U.S.  CBT means that overseas Americans (who, together, make up a population greater than that of the U.S. state of New Jersey) face the financial and administrative burden of taxation in two nations.
    • Many overseas Americans must pay expensive professional tax preparers to comply with complex and ever-changing tax laws and to keep them up to date on other new and changing reporting requirements.
    • Most U.S. citizens living abroad are not rich “fat cats” who use overseas residency to “game” the system but rather are ordinary working Americans.
    • Globalization means that the number of Americans living overseas will only grow with time.
    • Increasing numbers of Americans living abroad are denouncing their citizenship as the costs of maintaining U.S. citizenship have become too high and do not justify whatever benefits they may have.
    • Not all benefits of U.S. citizenship seem to follow overseas Americans, at least with regard to these major areas:
      • Many areas of the tax code discriminate against Americans abroad: Double or punitive taxation can occur in the treatment of foreign retirement savings plans, capital gains, non-qualified, non-U.S. pension plans, and bequests to surviving foreign spouses, to give a few examples.
      • The IRS outreach to overseas Americans has been woefully inadequate over time, and budget cuts have resulted in overseas IRS offices being closed, making the misinformation and confusion about U.S. tax filing even worse.
      • State Department budget cuts mean fewer services for Americans abroad and longer wait times for appointments to renew passports or conduct other important business.

    How is Democrats Abroad participating in the efforts to bring about a change to RBT?

    • Democrats Abroad has supported a change to RBT since its creation.  Using its resources of thousands of dedicated volunteer activists, DA is working with other organizations of overseas Americans to campaign in support of RBT.
    • Now that Congress is again turning its attention to comprehensive tax reform, DA believes that it has a genuine opportunity to influence the process.

    How can I help DA in its work on RBT?

    Remember, you have a voice! And that voice is best directed to your elected Federal lawmakers: The member of Congress and the senators of the district/state in which you last voted in the U.S.

    If you don’t know your member of Congress and/or your senators, you can look them up using these online tools. All you need is the zip code of the last place you voted in the U.S.

    House

    http://www.house.gov/representatives/find/

    There are also some Frequently Asked Questions on this page about how to contact your member of Congress.

    To find the address and phone number of your representative, look on the home page of their website, usually at the bottom. Sometimes this information is at the right hand side of the page.

    Senate

    If you know your voting state you can find your 2 U.S. senators in the table at this link:

    https://www.senate.gov/senators/contact/

    Clicking on the Senator’s name will take you to their website.  To find the address and phone number of your Senator, look on the home page of the website, usually at the bottom. Sometimes this information is on the right hand side of the page. You also may find a “Contacts” tab at the top of the home page.

    Here are some concrete actions you can take to make your voice heard.

     Contact Carmelan Polce at any time with questions (cpolce@tpg.com.au or 9380 1084)

    • Participate in the Congressional Call Storm – Thursday June 15!

    Organizations like DA sometimes plan “Congressional Call Storms” - an agreed day (and sometimes time period) for campaign participants to blitz Congress with phone calls about the same topic. The idea is to create a mass of calls that, literally, disrupt the day!  See the sample script below.

    Even if you can’t participate in the Congressional Call Storm, you can call your member of Congress and senators at any time to express your views on RBT – as well as any other issues of importance to you!

    Here is a sample script for calling your representative or senator regarding RBT. Make changes as necessary so that it relates to your own situation!

    The phone will be answered by the office receptionist.

    Hello, my name is ______________ and I am Representative/Senator ______________’s constituent in _____________ County, [State].  [If calling a Representative - My zip code is ___________.]

    I currently live in [city, country] and I am hoping to speak directly to the Senator/Representative or his/her staffer about a tax matter that impacts constituents like me who live outside the United States.

    [The receptionist may find you someone to talk to or may or speak to you themselves. This is the message you may want to relay. ]  

    I am calling to ask Representative/Senator _____________ to support Residency Based Taxation. As you may know, the U.S. is the only country that taxes its citizens on their world-wide income even when those citizens live abroad and no matter how long they’ve lived abroad. That means I pay taxes in [name of country] where I live, and I file a tax return to the IRS every year.  IRS tax forms for declaring foreign income are a lot more complicated, so besides being a nuisance, filing abroad is complex, costly and very stressful.

    I’m an ordinary US citizen. I moved to [country] to [be with my partner/ be with my family/ to take an exciting job/ other]. I/my family cannot afford to be double-taxed. I’m/we’re not wealthy, with lots of disposable income to spend on tax return preparers.

    I value my US citizenship. I vote every year I can. I pay attention to U.S. politics as much if not more than the average citizen. But I don’t think it’s fair that I must pay taxes in [country of residence] as well as to the IRS.

    The current law is costly, punishing, and unfair and is causing many of us to consider renouncing our U.S. citizenship.  I hope that shocks you because it shocks me.

    That is why I am asking Representative/Senator _________ to change the US tax laws from Citizenship Based Taxation to Residency Based Taxation.

    Can you please pass this message to Representative/Senator ________________ and ask her/him to support Residency Based Taxation. Thank you.

    • Write your member of Congress or your senators!

    Here are templates for creating your own letter to your representative and to your senators:

    Sample Letter Language – House of Representatives

    Writer’s Name

    Address 1

    Address 2

    City, State

    Country Post Code

     

    Date

     

    Representative Name

    Address 1

    Address 2

    Dear Representative ___________________

    Re:  Seeking your support for Residency Based Taxation

    I vote in [state and district #].  My voting address zip code is [zip code].  I currently live in [city and country of residency]. 

    As you may know, the U.S. is the only country that taxes its citizens on their worldwide income - no matter where they live and no matter how long they’ve lived abroad. Citizenship Based Taxation forces Americans like me who live abroad to report our income both to our country of residency and to the IRS.  Many of us are double-taxed, and all of us endure costly, stressful and complex filing of overseas income – which is much more complicated than filing income generated in the US. 

    The burden the law places on Americans living abroad is causing many to consider renouncing our US citizenship. This is intolerable. We are asking Congress to change the law from Citizenship Based Taxation to Residency Based Taxation. I ask for your support for Residency Based Taxation. 

    My personal story is as follows:…

    [Personal stories are very important and can be highly compelling.]

    I hope this has been helpful to you in understanding the serious and detrimental impact Citizenship Based Taxation has on the lives of ordinary Americans like me whose life happens to have taken abroad. 

    I value my U.S. citizenship. I vote every year I can. I pay attention to U.S. politics as much if not more than the average citizen. But I don’t think it’s fair that I must pay taxes in [country of residence] as well as to the IRS. 

    Thank you.

    Kind Regards,

    Name

    Voting address

    Voting city, state, zip code

    Sample Letter Language – Senate

    Writer’s Name

    Address 1

    Address 2

    City, State

    Country Post Code

     

    Date

     

    Senator’s Name

    Address 1

    Address 2

    Dear Senator ___________________

    Re:  Seeking your support for Residency Based Taxation

    I vote in [city and state]. My voting address zip code is [zip code]. I currently live in [city and country of residency]. 

    As you may know, the U.S. is the only country that taxes its citizens on their worldwide income - no matter where they live and no matter how long they’ve lived abroad. Citizenship Based Taxation forces Americans like me who live abroad to report our income both to our country of residency and to the IRS.  Many of us are double-taxed, and all of us endure costly, stressful and complex filing of overseas income – which is much more complicated than filing income generated in the U.S. 

    The burden the law places on Americans living abroad is causing many to consider renouncing our US citizenship. This is intolerable. We are asking Congress to change the law from Citizenship Based Taxation to Residency Based Taxation. I ask for your support for Residency Based Taxation. 

    My personal story is as follows.  .....

    [Personal stories are very important and can be highly compelling.]

    I hope this has been helpful to you in understanding the serious and detrimental impact Citizenship Based Taxation has on the lives of ordinary Americans like me who life happens to have taken abroad. 

    I value my U.S. citizenship. I vote every year I can. I pay attention to U.S. politics as much if not more than the average citizen. But I don’t think it’s fair that I must pay taxes in [country of residence] as well as to the IRS. 

    Thank you.

    Kind Regards,

     

    Name

    Voting address

    Voting city, state, zip code

    • Send a postcard to your member of Congress/senators!

    Here are templates for creating your own postcard to your representative and to your senators:

    Sample Postcard Language – House of Representatives

    Dear Representative__________________.

    I vote in [state and district #]. My voting address zip code is [zip code]. I currently live in [city and country of residency]. Americans like me who live abroad are forced by the U.S. tax system of Citizenship Based Taxation to report our income both to our country of residency and to the IRS. The U.S. is the only country that taxes its citizens on their worldwide income, no matter how long they’ve lived abroad. I/my family am/is not wealthy. I/we cannot afford to pay tax in both the US and [country of residence]. The current law is costly, punishing, stressful, and unfair and is causing many of us to consider renouncing our U.S. citizenship. That is why we are asking Congress to change the U.S. tax laws from Citizenship Based Taxation to Residency Based Taxation. I ask for your support for Residency Based Taxation. Thank you.

    Sample Postcard Language – Senate

    Dear Senator _______________________

    I vote in ___________ County, [State]. I currently live in [city and country of residency]. Americans like me who live abroad are forced by the U.S. tax policy of Citizenship Based Taxation to report our income both to our country of residency and to the IRS. The U.S. is the only country that taxes its citizens on their worldwide income, no matter how long they’ve lived abroad. I/my family am/is not wealthy. I/we cannot afford to pay tax in both the U.S. and [country of residence]. The current law is costly, punishing, stressful, and unfair and is causing many of us to consider renouncing our U.S. citizenship. That is why we are asking Congress to change the US tax laws from Citizenship Based Taxation to Residency Based Taxation. I ask for your support for Residency Based Taxation.  Thank you.

    • Participate in Democrats Abroad’s RBT Email Campaign!

    Democrats Abroad has initiated a campaign on the Democracy.io website, a platform for communicating with elected officials in both houses of the U. S. Congress. With Democracy.io, you can write an email message and send it automatically to both of your senators and to your member of Congress!

    Please use this link to access the Democracy.io messaging platform:  WeNeedRBT

    The WeNeedRBT campaign link enables DA to track how many supporters of RBT have sent messages to Congress. Thanks for using this link and being counted in our campaign!

    Here is some sample language for your Democracy.io message:

    I vote in [state and district #]. My voting address zip code is [zip code]. I currently live in [city and country of residency]. 

    As you may know, the U.S. is the only country that taxes its citizens on their worldwide income - no matter where they live and no matter how long they’ve lived abroad. Citizenship Based Taxation forces Americans like me who live abroad to report our income both to our country of residency and to the IRS. Many of us are double-taxed, and all of us endure costly, stressful and complex filing of overseas income – which is much more complicated than filing income generated in the US. 

    The burden the law places on Americans living abroad is causing many to consider renouncing our US citizenship.  This is intolerable.  We are asking Congress to change the law from Citizenship Based Taxation to Residency Based Taxation.  I ask for your support for Residency Based Taxation. 

    My personal story is as follows:…

    [Personal stories are very important and can be highly compelling.]

    I hope this has been helpful to you in understanding the serious and detrimental impact Citizenship-Based Taxation has on the lives of ordinary Americans like me who life happens to have taken abroad. 

    I value my U.S. citizenship. I vote every year I can. I pay attention to U.S. politics as much if not more than the average citizen. But I don’t think it’s fair that I must pay taxes in [country of residence] as well as to the IRS. 

    Thank you.

    Kind Regards,

    Name

    • Vote from abroad!

    Last but not least, make sure you vote in whatever elections you are eligible! For more information, check out www.Votefromabroad.org 


  • donated 2017-05-08 07:21:08 -0400

  • DA Lion City is hosting an Earth Day Celebration on Sat April 22 - something for everyone!

     

     

    DEMOCRATS ABROAD LION CITY EARTH DAY CELEBRATION

    WHEN: SATURDAY 22 APRIL 10:30-2:00

    WHERE: ST REGIS RESIDENCES 

    RSVPs ESSENTIAL.  

    For more information and to RSVP Click here. 

    The mission of our earth day event is to inspire our members and their families to learn more about the state of our planet and to join our political actions for a) fighting the current administration’s destructive environmental agenda and b) promoting legislators that support positive environmental policies and legislation. 

    Our event features speakers who will educate our members on the scientific, political, social, and economic challenges and triumphs surrounding protecting our planet. Following the speakers we will write post cards to our legislators (language provided) and then have a fun pot luck lunch and pool party.     

    The Program is starting promptly at 10.30am.

    Speakers:

    Ken Hickson -

    With more than 50 years’ experience in the communications industry in Asia Pacific, Ken Hickson is a leading sustainability advocate and author of six books, including “The ABC of Carbon: Issues and Opportunities in the Global Climate Change Environment.”  As Chairman/CEO of the Singapore-based consultancy Sustain Ability Showcase Consultancy Asia (SASA), he manages public affairs, media relations, editorial services, as well as business/investment advisory services for a range of public and private sector clients.  He is a regular speaker and writer on all aspects of sustainability and climate change, as well as an advocate for the switch to clean energy and energy efficiency. 

    He has been an advisor and consultant to Government agencies in Singapore, notably the National Environment Agency (NEA) and Urban Redevelopment Authority (URA), and acted for many private sector businesses in green building, cleantech, clean energy and energy efficiency sectors, including Armstrong Asset Management, The Blue Circle, TEALE and BBP. 

    Ken is a member of the Singapore Institute of Directors (MSID), the advisory council of Eden Strategy Institute and Fellow of the Institute of Public Relations Singapore (FIPRS). In addition to his business and consulting experience, he has worked as a journalist and editor, covering television, radio, newspapers, magazine and online media. 

    He is a regular lecturer, speaker, trainer and moderator at events for many organizations and universities, including NTU, NUS, SMU and SIM in Singapore, and in Taipei for the Asian Productivity Organization (APO). 

    Cord Briggs -

    Cord Briggs is a sustainability and Clean Tech professional with years of experience working as a Director for the top Environmental Non-Profit, Clean Water Action in Philadelphia Pa.  During this time Cord designed and executed grassroots lobbying and policy campaigns at the municipal, state, and federal levels in order to pass legislation such as stopping new natural gas drilling in Pennsylvania state parks; protecting the drinking water of 117 million Americans under the Clean Water Act; and passing the first ever federal rules limiting methane from oil and gas operations. 

    In Singapore, Cord is pursuing an MBA from NTU and is consulting for several cutting edge clean tech companies working in micro grids, energy storage systems, renewables, and energy intelligence software. 

    Research Fellow:

    Rebecca Kreutter -

    Rebecca Kreutter was born in Seoul and grew up in Singapore, where she attended the Singapore American School. She received her B.A. in public policy from Princeton University with a concentration in environmental studies.  Rebecca is part of a Master's fellowship program through Princeton and is studying climate policy, including climate resilience and the economics of climate change.  Her work on "Econometric Drivers of Forest Change in India," which analyzed satellite data on land-use in India, won her a senior thesis prize. 

    As a Gilbert S. Omenn ’61 and Martha A. Darling MPA ’70 Scholar, Becky is interested in the interplay of climate science, economics, and policy.  She is working in the White House Office of Science and Technology Policy (OSTP) on climate resilience, climate data and tools, energy policy, and communications.  Before that, Becky interned at the Regional Greenhouse Gas Initiative (RGGI) in New York. She completed her SINSI internship with the Office of Energy Policy and Systems Analysis at the Department of Energy, conducting research and comparative analysis on the climate and environmental footprints of the national transmission, storage, and distribution infrastructure.


  • Lion City Committee elects new national officers at 2017 Annual Meeting

    Democrats Abroad Lion City Committee is pleased to announce that the following team of leaders was elected to national officer positions at our 2017 AGM that took place on Tuesday 14 March:

    Patricia Reed-Chair,

    Bill Gelman-Vice Chair,

    Naomi Bendiner Woldmar-Secretary/Treasurer,

    Members-At-large - Tricia Augustine Hamilton, David Klingensmith and Emily Tabak,

    Counsel - Dian Boothe, appointed by the chair.

    http://i567.photobucket.com/albums/ss119/DemsAbroad/2017AGMpic_zpse6eb1879.jpg

    Thanks to those who participated in the meeting in person and by proxy.

     

     


  • 2017 AGM - Meeting Notice, Proposed Agenda and other Materials

    Democrats Abroad is holding its 2017 Annual General Meeting on Tuesday 14 March at 7pm at 5 Farrer Drive, Singapore  259277.  Click here for more information about the location and to RSVP.

    At the meeting we will elect a new slate of national officers and we will prepare postcards with messages of opposition to Trump to send to the White House as part of the #IdesOfMarch 2017 campaign.

    These materials important for the meeting are accessible at the links.

    DALCC AGM Meeting Agenda

    2017 DALCC National Officer Election Timeline and Rules

    List of DALCC National Officer Nominees (nominations are still open but close at midnight on 1 March 2017)

    DALCC By Laws

    DALCC By Laws with proposed amendments

    DALCC 2017 Proxy Form 

    DALCC 2016 AGM Draft Minutes

     


  • Inauguration Call To Action: HomePack for Demanding Accountability

    Thanks for joining our Inauguration Action demanding Congress perform its Constitutional duty to act as an independent check on the Executive Branch.  Many of us hold grave concerns about the conflicts of interest that exist between the business interest of the incoming president (and some of his appointees) and the interests of the nation.  

    We are therefore marking the troubling start of Trump's term by handwriting letters to Congress asking them to sponsor legislation that requires the President of the United States and his Cabinet members to disclose details of all their business dealings and US tax returns and put all business holdings in a blind trust.

    In order to help prepare your letter we have drafted some rough bullet points on this grave issue of concern and have prepared two sample letters  - one suitable for an adult and one for a child.  Letters to Congress from children stand a decent chance of being answered!  Encourage yours to write!  Find the links to these three documents below.

    If you do not know the name of your member of the House of Representatives or your Senators these links will help you find them, and their addresses, using the zip code of your voting address: 

    http://www.house.gov/representatives/

    Please let us know that you have sent a letter or letters.  We will report back on the success of our campaign.

    Democratically yours,

    Carmelan Polce

    Vice Chair, DA Lion City Committee

    http://www.scribd.com/document/336745601/Bullet-Points-for-Inauguration-Action-Letter-Writing

    http://www.scribd.com/document/336745600/Letter-Format-Child

    http://www.scribd.com/document/336745599/Letter-Format-Adult

     


Social justice advocate and campaigner. On a work assignment in New York. Home is Sydney. Votes in Pennsylvania.