Taxation

The Democrats Abroad Taxation Task Force (TTF) was formed to 1) research U.S. tax policy as it affects Americans living outside the U.S. and 2) consider, develop and execute initiatives aimed at enacting reforms that resolve adverse impacts.

We undertake research-based advocacy to describe the problems U.S. taxation causes Americans abroad and support our reform recommendations.  Our latest research on the tax filing and financial account reporting experience of Americans abroad was published in March 2019.  Click here to download the report.

Democrats Abroad has published a "laundry list" of tax code provisions that discriminate against Americans abroad - with accompanying reform recommendations on how to fix them.  The list is here:  smarturl.it/HowToFix23

We fear Congress is too divided to find remedies for each of the many and myriad tax problems we have identified.  But we are determined to demand it of them.

We are committed to Residency Based Taxation as a remedy, requiring little effort by Congress, that addresses the vast majority of the tax problems faced by Americans abroad.

Further, we will continue to promote:

  • the elimination of FATCA reporting for the accounts of Americans abroad,
  • the repeal of the Windfall Elimination Provision,
  • an exemption for American business owners abroad from the transition taxes in the 2017 Tax Cuts and Jobs Act, and
  • a citizenship remedy for "accidental Americans".

We support tax reforms that help reduce inequality, boost opportunity for all Americans and raise enough revenue, predominantly from those with the greatest ability to pay, to meet public needs.

Democrats Abroad Taxation Task Force

TaxationTF@democratsabroad.org

DA Taxation Leadership:

Carmelan Polce
| Taxation Task Force Chair
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    News

    US Double Tax Treaties, Expat tax reform coalition at work on the Hill, and More GILTI regs

    Thanks to all who participated in the Congressional CallStorm organized by Democrats Abroad to mark the 2019 International Tax Filing Day. With the help of all you expat tax activists we continue to build the profile of Americans abroad struggling to comply with double taxation and to bring our problems to the attention of members of Congress in both parties and across both chambers. We need the support of all those interested in expat tax reform in order to make it happen. Thanks again for your support.

    Tax Treaties at last on the Congressional agenda

    You may be aware that since Senator Rand Paul took office in 2006 he has blocked all tax treaties from coming to the floor of the U.S. Senate for a vote.  During this time tax treaties between the U.S and Hungary, Luxembourg, Switzerland, Chile, Spain, Poland, Japan and Portugal (at least) have been stuck in limbo, not to mention reforms made to the Model U.S. tax treaty. We recommend that all Americans abroad who vote in Kentucky to contact Sen. Paul and urge him to lift his holds on these treaties.

    This week the Senate Foreign Relations Committee is expected to begin consideration of the treaties with Hungary, Chile, Spain, Japan and Portugal. Double taxation treaties address a range of matters that impact U.S. citizens living abroad, most especially the treatment of savings and retirement plans that receive beneficial tax treatment in our countries of residence but no favorable treatment under the U.S. tax system. When U.S. tax treaties are silent on this matter they leave payments made from foreign pensions, including those to which we may be legally mandated to contribute, subjected to double taxation.

    It’s perhaps too early to anticipate those eight treaties moving closer to a floor vote in the Senate, but reporting suggests Sen. Paul is meeting with Treasury Sec. Steven Mnuchin to discuss his privacy concerns. We are following this issue and look forward to reporting back.

    Americans abroad on Capitol Hill

    Democrats Abroad gives an enormous shout out to our colleagues at Association of Americans Resident Overseas (AARO) and Federation of American Women’s Clubs Overseas (FAWCO) for their amazing week of meetings on Capitol Hill about expat tax reform. DA’s Tax Task Force was pleased to brief some members of their delegation and share with them an extensive list of members of Congress for them to meet (including names of key aides to speak to). We have since de-briefed with them and, to put it very briefly, they learned that: a) our concerns and recommendations are getting through to Congressional tax writers, and b) there remain a few outliers who either CONTINUE to harbor major misunderstandings about the demographics of Americans abroad or have concerns that RBT will open the flood gates to mass exploitation by wealthy Americans using real or faux off-shore residency to move assessable income to low-tax or no-tax countries.

    Yes, we’ve heard it all before but at least these prejudices are well outside the mainstream.

    Big, big THANK YOU to AARO and FAWCO for hitting it hard and fighting the good fight for a switch from citizenship-based taxation to residency-based taxation, financial account reporting reform and more. Heroic work by excellent colleagues (who, like us, are volunteers and) who share our goal of persuading Congress to fix the Internal Revenue Code and other laws and regulations that cause serious personal and financial harm to Americans living abroad.

    Treasury announces more changes to GILTI regs

    It’s been almost 18 months since Americans who own companies registered abroad were shocked to learn of two new taxes in the 2017 Tax Cuts and Jobs Act (TCJA) that could destroy not only their businesses but also their life savings. Regulations implementing the Repatriation Tax and GILTI Tax announced last year failed to provide material relief to Americans abroad. Last Friday June 14th Treasury issued “final regulations” on GILTI, Subpart F income and tax credits. You can read about them here (IRS and Treasury advice) or here (The Tax Adviser tax blog).

    Or, on Thursday June 27th you can tune in to a webinar about the new regs hosted by Israel-based tax practitioner, Monte Silver. Monte has been very active in the work to persuade Congress, Treasury and the IRS of the need for relief for Americans abroad from these two “transition taxes” from the TCJA of 2017. From Monte -

    This webinar, aimed at US shareholders of Controlled Foreign Corporations and their US tax professionals, will discuss the 3 different GILTI-related regulations recently published by the U.S. Treasury: What they mean and how do they benefit you. The webinar will also briefly touch upon the latest developments in the Transition/GILTI tax advocacy efforts.

    Agenda

    1. GILTI - key concepts and understanding how the tax is structured/calculated

    2. GILTI - Review of the 3 Recent GILTI regulations - what they say and their relevance to you.

    3. GILTI/Transition tax advocacy update

    When: Thursday June 27, 2019.

    1. Asia/Europe - Sydney 6pm, Japan/Seoul 5pm, Beijing 4pm, 11 am Israel, France/Germany 10 am, London 9am

    To register: https://zoom.us/webinar/register/WN_YjstBjE7Q82R0fl7_vp1gg

    2. Americans/Europe - 9am PST, 12pm EST, 5pm London, 6pm France/Germany, 7pm Israel
    To register: https://zoom.us/webinar/register/WN_G_pToEe_QayzHjRD0FE1GA

    Disclaimer:

    Democrats Abroad does not provide personal advice on tax matters.

    Tax advice should be obtained from a qualified tax professional (accountant, lawyer, adviser or return preparer) who understands both the U.S. tax system and the tax system of the country where the taxpayer lives (including any applicable tax treaty). 

    If you need tax advice Democrats Abroad recommends the Tax Return Preparer Directory published by our colleagues in expat tax advocacy, American Citizens Abroad. Click here to reference their directory.

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

    DEMOCRATS ABROAD TAXATION TASK FORCE

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    Intl Tax Filing Day CallStorm - Thur June 13 2019 - time to call Congress!!

    The 2019 deadline for U.S. citizens living abroad to file their taxes is Monday June 17 (as the usual international tax filing deadline of June 15 falls on a Saturday this year).  

    In order to draw attention to International Tax Filing Day Democrats Abroad is hosting a Congressional CallStorm.  We invite  U.S. citizens who support expat tax reform to participate in this campaign on Thursday June 13 (neither Friday June 14th nor Monday June 17th are House and Senate sitting days) and call their members of Congress asking for relief.

    Everything you need to participate in the CallStorm is in this guide for campaign participants.

    Date for calls:  Thursday June 13, 2019

    Date for written and electronic messages:  Through the month of June

    Who to contact:  your two Senators and your member of the House of Representatives.  If you don't know who they are advice for finding them and their contact details are in the guide.

    What to say:  scripts for calls and sample language for emails, letters and postcards are in the guide. If you can add your personal story about why expat tax reform is important to you that would be even better.   Specifically, we are asking for -

    • A switch from our current system of citizenship based taxation to residency based taxation, in which we’d still be required to report US-based income to the IRS, but not the income we make in and pay tax on abroad 
    • the Overseas Americans Financial Access Act, which would exempt us  from disclosures of the  financial accounts we hold in our countries of residence which we use to pay bills and save for the future  

    Further details on our tax advocacy ideals, strategy and asks are in the guide.

    Thanks in advance for your support.  As noted in the guide, our work with the House tax writing subcommittee is making serious progress, but we need to build support for expat tax reform right across Congress.  To do that we need all who are seeking relief from the burden of complying with two tax jurisdictions to call your elected representatives and ask for it.

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

    Democrats Abroad Taxation Task Force 

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    Thanks to Rep Dina Titus (D-NV01) for telling Ways & Means that Americans abroad need tax relief

    Democrats Abroad is enormously grateful for the long-standing support that Rep. Dina Titus has extended to the Americans abroad community.  She's always in our corner and never refuses an opportunity to show her concern for our problems - with the U.S. tax system and otherwise - and to push for common-sense reforms to address them.  

    In response to our outreach about the Ways and Means Members Day Hearing, Rep. Titus has published this statement calling upon the Ways & Means Committee to ease the financial burdens placed upon Americans abroad by the U.S. citizenship-based taxation system.  Thank you, Rep. Titus, for noting that Americans abroad have been for too long neglected by Congress and for calling upon Congress to work together to provide us with relief.

    Please also see this statement from Rep. Jamie Raskin (D-MD08) telling the Ways & Means Committee we need a switch from citizenship-based taxation to residency-based taxation.

    It's not too late for rank and file members of Congress to join their voices to those of Reps Raskin and Titus in raising with the Ways and Means Committee the serious problems facing Americans abroad in complying with the filing obligations of two tax jurisdictions.  Please reach out to your representative and ask him/her to contact Ways & Means Committee Chairman Richie Neal and Ranking Member Kevin Brady about the urgent need for expat tax reform.  This guide will help you do so.

    Please contact us at taxationtf@democratsabroad.org with comments or questions.

    Democrats Abroad Taxation Task Force

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    Thanks to Rep Jamie Raskin (D-MD08) for telling the Ways and Means Committee we need RBT

    Further to our report from last week, we are delighted that Rep. Jamie Raskin (D-MD08), a former member of Democrats Abroad-France, has responded to our request to provide a submission to the June 4 House Ways & Means Committee Members' Day Hearing about the urgent need for expat tax reform.   We send our sincere thanks to the Congressman for his on-going support for our community and for legislation to address the serious personal and financial harm we suffer due to citizenship-based taxation.  Click here to read Rep. Raskin's submission.

    As you will know from DA's previous tax advocacy reports, we now have a bi-partisan team from the House Ways and Means Committee working on the development of a proposal to enact residency-based taxation.  But there's much more work to do to persuade the other 40 members of that committee that this reform is urgently needed and can be sensibly implemented.  We continue our outreach to those important members, educating them on the harm citizenship based taxation causes ordinary, middle-class American families and persuading them to act urgently on our behalf.

    We are counting on all Americans abroad supporting residency-based taxation to reach out to their elected representatives and reinforce our work.   Please call, write or message your members in Congress and tell your personal story about why a switch to residency based taxation is so important to you.   If you have trouble getting started then please refer to this guide to find your representatives and to add your voice to the cause.  It's imperative that members across Congress, in both houses, on all committees and of all political stripes hear from their overseas constituents about the urgent need for a switch to residency based taxation.

    Thanks for your help.  Please contact us on taxationtf@democratsabroad.org with comments or questions.

    Democrats Abroad Taxation Task Force

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