The Democrats Abroad Taxation Task Force visited Congressional offices in Washington D.C. from October 20-24 to continue conversations on tax reform for Americans abroad. This report serves as a summary of the meetings attended.

The Democrats Abroad Taxation Task Force will once again be in Washington, DC, from October 20 to 24, meeting face-to-face with Members of Congress to fight for the interests of Americans living abroad. As part of this advocacy, we want to hand-deliver your personal tax and financial access horror stories directly to congressional staff and lawmakers.

Click here to share your horror story

Your experiences are powerful tools in showing Congress the real impact of outdated and unjust US tax policies on overseas Americans. We are especially interested in stories related to: residence-based taxation, FBAR and FATCA reporting, PFICs, small business issues, and problems saving for retirement.

By sharing your story, you help strengthen our voice in Washington and make the challenges facing overseas Americans impossible to ignore.

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

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

Below is a copy of the submission the Democrats Abroad Global Taxation Task Force submitted to the House Financial Services Committee on the Hearing Entitled: Oversight of the Financial Crimes Enforcement Network (FinCEN) that took place on February 14, 2024.

Click here to download a pdf of DA's submission to the House Financial Services Committee in full.

The webinar that was going to be tomorrow, Wednesday, September 27 at 12pm ET with Rep. Don Beyer to talk about the Tax Simplification for Americans Abroad bill is now cancelled.

We will come back to you once we are able to reschedule, but here's what you can do in the meantime:

1. Click here to donate to Democrats Abroad. We recommend $10 or $20, but any donation amount is welcome.
2. Click here to contact your House Representative *TODAY* and ask them to co-sponsor the bill. Because no one will be there to answer a call or check emails once the government shuts down on October 1. So act now!

Sincerely,
Rebecca Lammers
Chair, Democrats Abroad Taxation Task Force
democratsabroad.org/taxation

P.S. Don't forget to sign up for the latest tax advocacy new by joining the Taxation Task Force mailing list. Click here to join now.

We are excited to announce that H.R. 5432 Tax Simplification for Americans Abroad Act has been introduced in the U.S. House of Representatives. Join us for a webinar with the sponsor of the bill, Congressman Don Beyer (D VA-08) on Wednesday, September 27 at 12pm ET to find out more!

Click here to RSVP

The Tax Simplification for Americans Abroad Act will:

• Create a simplified tax return form to help make it easier for Americans filing from abroad who owe no U.S. tax
• Eliminate double taxation for pensions and retirement distributions (including Social Security benefits), scholarships, fellowship grants, disability benefits, childcare expenses, family medical leave, and unemployment benefits
• Consolidate the FBAR into FATCA, increase the filing threshold, and eliminate the requirement to report separately to FinCEN

Please call your House Representative today and ask them to co-sponsor the bill. Click here for how to call and what to say.

Need more info to make the call? Join us for the webinar where we will lay out clear instructions for how to call your House Representative!

Don't forget to RSVP to attend!

Thank you for taking the time to help us pass the bill!

Don't forget to sign up for the Taxation Task Force mailing list by clicking here for the latest on tax updates.

On Friday, December 30, 2022, the IRS issued Notice 2023-11, which provides temporary relief from the FATCA reporting rules for non-U.S. banks (known as FFIs, “foreign financial institutions”) in about 90 countries (known as Model 1 Jurisdictions). The notice specifically provides relief for reporting of U.S. TINs (Social Security or ITIN numbers) for 2022, 2023, and 2024.

Democrats Abroad is encouraged by the recognition by Treasury and the IRS that modifications to the FATCA-reporting regime are necessary. Although temporary relief for non-U.S. banks is a positive step, the temporary relief is provided to FFIs rather than directly to Americans abroad. We would prefer permanent relief that resolves the core problem caused by FATCA: loss of access to non-U.S. bank accounts for Americans abroad.

In 2022 the Democrats Abroad Taxation Task Force met with IRS and Treasury officials to raise awareness of the ongoing tax and financial-access issues experienced by our constituency. We are pleased to see some of our views are recognized in this IRS notice. We look forward to an ongoing productive dialogue with these government agencies and Congress in order to resolve the tax and financial-access issues that severely impact the daily lives of Americans abroad.

Highlights from the notice that are relevant to Americans abroad include:

• Treasury and the IRS acknowledge that foreign countries, non-U.S. banks, and U.S. citizens (including for Americans living abroad) are concerned about account closures when a U.S. TIN has not been provided.
• Treasury and the IRS acknowledge notification that some non-U.S. banks are refusing to open or maintain accounts for Americans abroad, or are “otherwise providing access to accounts on less favorable terms than apply to other account holders, even if the U.S. citizen provides a U.S. TIN.”
• One of the requirements for FFIs to receive relief is for the relevant country to encourage its banks not to discriminate against Americans abroad who do provide a U.S. TIN.
• Even though Americans abroad and FFIs had up to 6 years to provide U.S. TINs for FATCA reporting, TINs were still not provided.
• Relief to FFIs is limited to reporting on accounts opened before a certain date and is conditional upon the bank providing U.S.-citizen customers with information on how to come into tax compliance and/or renounce citizenship.
• Relief also obliges banks to take steps to encourage tax compliance by U.S. citizens like providing links to the IRS and U.S. State Department’s websites.

The FBAR/FATCA Task Force has closely followed the progress of the FATCA lawsuit (Mark Crawford et al vs US Department of Treasury et al) filed by Sen Rand Paul and others seeking to stop FATCA.  Yesterday, April 26, the case was thrown out of court.  This was, in many respects, expected after the judge denied the plaintiffs' request for a preliminary injunction to stop the enforcement of the Act last September. The plaintiffs then added four plaintiffs, but the judge has found that the plaintiffs still fail to demonstrate standing to sue and the violation of a protected interest.*

The plaintiffs can, of course, appeal the judge's decisions.  We continue to follow this case and will keep you up to date with any further developments.

And we continue the work to promote our recommended reform to FATCA, the Same Country Safe Harbor for Americans Abroad, which would exempt the accounts of Americans abroad in their legal country of residence from FATCA disclosure.

Please contact the FBAR/FATCA Task Force at any time with questions: [email protected]

*This is from the court order terminating the case:  "...the Court finds that none of the Plaintiffs has standing to sue Defendants. No individual Plaintiff has suffered an invasion of a legally protected interest, which is concrete and particularized, and actual or imminent, not conjectural or hypothetical. Moreover, no alleged injury is fairly traceable to the actions of the Defendants, but rather, the actions of an independent third party. Finally, there are no allegations that it is likely that the alleged injury will be redressed by a favorable decision."

After an action packed September full of results and news, our FATCA work has continued apace. The results are not as evident in this last quarter as they were in September, but we continue working to generate Senate support for "Same Country Safe Harbor", details below.

As those following FATCA would expect, a great deal has happened this month – and it is not over yet.  This is due largely to (what we were treating as – see below!) the looming September 30 2015 deadline for the first transfer of the financial account information of US Persons to the IRS under the terms of the FATCA legislation, regulation and intergovernmental agreements.