News

Rep. Maloney and Rep. Beyer re-introduce bills to provide relief and support to Americans Abroad.

On Tuesday 17 September Rep. Carolyn Maloney (D-NY12) and Rep. Don Beyer (D-VA08) introduced two bills to provide support and relief to Americans Abroad.  They are the Commission on Americans Living Overseas Act and the Overseas Americans Financial Access ActDemocrats Abroad endorses these bills and thanks Rep. Maloney and Rep. Beyer for their on-going interest in and support for the Americans abroad community.

Commission on Americans Abroad Act

The Commission on Americans Abroad Act, first introduced by Rep. Maloney and former New York Rep. Charlie Rangel in the 113th Congress, would create a commission to establish the impact of U.S. laws and regulations on Americans living abroad and make reform recommendations.  You can read about it here.

Overseas Americans Financial Access Act

The Overseas Americans Financial Access Act, first introduced by Rep. Maloney in the last Congress, provides an exemption for Americans abroad from all Foreign Account Tax Compliance Act (FATCA) reporting for the accounts we hold in the countries where we live.  FATCA was created to discourage and apprehend Americans using foreign financial accounts to hide money from the IRS; it was never intended to track the accounts we use in the places where we live to pay our bills and save for the future.  You can read about it here.

Democrats Abroad is in Washington DC this week (18-20 September) for more talks about expat tax reform and will be discussing these bills in our meetings.  Expat tax reform activists are encouraged to participate in our Congressional CallStorm this week to tell our elected representatives that we need relief from the unjust burden that the U.S. tax code and other laws and regulations place on Americans abroad.

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


DA is in DC next week. Expat Tax Reform Activists, it's time to call Congress.

Democrats Abroad is back on Capitol Hill again next week to talk to Congress about Residency Based Taxation, FATCA reform, Tax Cuts and Jobs Act fixes and other recommendations aimed at reducing the burden U.S. taxation places uniquely on Americans living abroad.   We especially look forward to meetings we have scheduled with the Ways and Means Committee for updates on their work on legislation to enact a switch from Citizenship Based Taxation to Residency Based Taxation.

Please help us demonstrate the enormous support that exists across the Americans abroad community for these critical reforms by reaching out to your elected representatives some time between 16 and 20 September.  This campaign guide has all you need to call or write your members of Congress.

Democrats Abroad UK is hosting a Webinar on 17 September for those who would like a tutorial about how to contact their members of Congress.  Click here for more information and to register.

As usual,  in the follow-up to next week's expat tax reform meetings we will publish a report on what we learned.  Please send comments or questions to taxationtf@democratsabroad.org.

DEMOCRATS ABROAD TAXATION TASK FORCE


TAXATION TASK FORCE WEBINAR ON HOW TO CONTACT YOUR MEMBERS OF CONGRESS

Democrats Abroad will be going to Washington DC to speak to Members of Congress (MoCs) on Wednesday, September 18th to Thursday, September 19th in our continued effort to advocate for a switch from Citizenship Based Taxation (CBT) to Residency Based Taxation (RBT).

We need your help and support to contact your Members of Congress during our visit to show Congress how important our issues and that they need to take action.

You are invited to attend this webinar on Tuesday, September 17 at 3pm EST to learn how to contact your Members of Congress in support of our tax advocacy efforts and to ensure your voice is heard!


Click here to RSVP to attend the webinar
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Mid-Summer expat tax reform updates

Mid-summer is by no means the most dynamic time of the year on Capitol Hill but we are expecting a few interesting things to happen for Americans abroad in the time between the end of Congress’s Fourth of July recess and its August recess.

Legislation

Americans Abroad Caucus co-chair Representative Carolyn Maloney (D-NY12) is expected to re-introduce the two bills of interest to Americans abroad:

  • Commission on Americans Living Abroad Act, which would form a standing commission to review laws that have adverse impacts for Americans abroad and to prevent new laws from being enacted that inadvertently harm non-resident Americans; and
  • Overseas Americans Financial Access Act, which exempts from all FATCA reporting the accounts of Americans abroad in the countries where they live.

Work on legislation to enact Residency Based Taxation (RBT) is currently in the hands of Ways and Means Committee staffers, i.e. lawyers who have been briefed by our RBT champions on the House Ways and Means Committee, Democrats Abroad, and all of our colleague organizations advocating for expat tax reform.  They are taking a fresh view of the policy aims, have undertaken preliminary work on the 2019 bill and are making it a “high priority August recess project”.  In our view this is really great and important. 

Because the bill that results - developed on the basis of advice from all the Americans abroad tax reform activists - will end up being a W&MC work product.  Reform proposals often run into serious roadblocks when they reach the Ways and Means Committee staffers.  Having the bill originate with W&M gives it a much better chance of getting through to the Committee review process which is a critical step along the path.

We will keep calling and emailing and pushing for updates on the legislation as it develops.  As always, RBT activists keen to see a great bill emerge should focus their outreach efforts on their members of Congress.  This campaign tool will help.

Tax Treaties

This week (commencing Monday 15 July) the Senate is expected to hold votes to ratify updates to existing tax treaties with Japan, Spain, Switzerland and Luxembourg.  As you may know, the Senate has not voted on any tax treaties since Senator Rand Paul took office in 2006.  Sen. Rand is expected to withhold his vote on these treaties, but they are expected to generate enough support for ratification.

Democrats Abroad has not reported on the changes to those treaties, but it may interest our members and other Americans living in these four countries to understand the changes that may affect them.  Those interested should contact the country committee chair to discuss.

National Taxpayer Advocate

After 18 years in the position Nina Olson is retiring as the IRS National Taxpayer Advocate.   Ms. Olson has published an annual report to Congress known as The Purple Book which includes recommendations for improving service to taxpayers.  She has included non-resident taxpayers in her assessment of IRS services, including calling repeatedly for reforms to FATCA and FBAR reporting.  The 2019 Purple Book, published in February of this year, was no exception. 

Our analysis of the recommendations suggests the following items are noteworthy for American taxpayers abroad:

#14 - Provide additional time for non-resident taxpayers to make adjusted claims due to math errors

#12 - Reconcile FBAR and FATCA reporting and eliminate duplication - this has been included amongst Olson's recommendations since at least 2014.

#40 - Allow for a period of notice and comment prior to the signing of new FATCA IGAs (in recent weeks the U.S. signed its most recent FATCA IGA with the Seychelles)

#46 - Require the IRS to address comments made by the National Taxpayer Advocate on proposed rules before enacting them

Ms. Olson’s last day as National Taxpayer Advocate is Wednesday July 31, 2019.  Her successor has not as yet been appointed.  We thank her for her service and wish her well.

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

DEMOCRATS ABROAD TAXATION TASK FORCE


Democrats Abroad Residency Based Taxation FAQs - Update through June 2019

Happy Fourth of July!

Best wishes for glorious celebrations of our nation's 243rd birthday, filled with delicious BBQs, refreshing beverages and fabulous fireworks.

And when the celebrations are over if you are interested in turning your mind to work by Democrats Abroad and the rest of the expat tax reform coalition to persuade Congress to enact a switch from our current system of Citizenship-based Taxation to Residency-based Taxation (RBT), then you might want to see our RBT Frequently Asked Questions doc.  We have updated it for progress achieved through June of 2019 and are hereby publishing it for your reference.  

Please send comments or questions - or FURTHER questions for us to add to this document! - to taxationtf@democratsabroad.org.

DEMOCRATS ABROAD TAXATION TASK FORCE


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).

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


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 


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


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


DemsAbroad asks friends of Americans Abroad in Congress to raise RBT at the W&MC Members' Day Hearing

On Tuesday June 4th the House Ways and Means Committee will hold its Members' Day hearing enabling members of the House to comment on matters within the Committee's jurisdiction.  Democrats Abroad has reached out to members who are important friends of the Americans abroad community asking them to make submissions to the hearing about the need for Residency Based Taxation.  We have written to Rep Carolyn Maloney (D-NY-12), the Democratic co-chair of the Americans Abroad Caucus, Rep Dina Titus (D-NV-01) and Rep Jamie Raskin (D-MD-08), a former member of Democrats Abroad France.  

As we noted in our last report, we are delighted that there is now a bi-partisan team of Ways & Means Committee members working on a proposal to introduce residency based taxation.  We, in collaboration with the other organisations advocating for expat tax reform, continue to reach out to the all-important members of the Ways and Means Committee to profile the importance of this urgently needed reform.  It's great to have other members of Congress assisting us in this important work.

We will report back on the hearing.

In the mean time, it is our understand that an important meeting will take place the week of Monday 3 June between the Beyer-Holding team working on the residency based taxation proposal with legislative counsel.

Also, the week of Monday 10 June a delegation of members from Association of Americans Resident Overseas and the Federation of American Womens Clubs Overseas will be on Capitol Hill making the case for residency based taxation (as well as likely discussing other matters important to Americans abroad).  We have assisted them with their Congressional outreach and wish them the best in their meetings. 

You don't have to go all the way to Washington DC to make your views heard - on the matter of residency-based taxation or anything else that may interest you.   Advice for finding your elected representatives and calling or writing to them are included in this guide.   All (courteous and sincere) outreach is helpful.  

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