A guest post originally published here.
The IRS tax season just opened on Monday and with that, people are scrambling to get their US tax return in before the deadline. For Americans abroad, this can be a very anxiety provoking and stressful process because it is well documented that filing taxes for Americans abroad is more difficult for Americans outside the US than inside the US. According to American Citizens Abroad, it is estimated that return preparation fees for Americans abroad is between $2,000 and $3,000 and significantly higher for small business owners, while the average fee in 2021 was $323 for a return with itemized deductions and $220 for a return without itemized deductions.
The fact that Americans abroad are liable for filing and paying tax both in the country they live in as well as in the US, it is difficult for Americans abroad why they are subject to tax in two countries since their immigrant counterparts don’t face the same tax filing or liability from their home countries. The United States is unique in that its citizens are liable for US tax on non-US sourced income. The US tax code is completely unique and out of step with the tax system experienced in the rest of the world, which makes it difficult for Americans abroad to remain in compliance with their US tax filing obligations, but not impossible.
On top of this, the IRS makes it difficult for Americans abroad to remain compliant with their tax filing obligation for many reasons, but one of them is that online tax preparation software options aren’t American abroad friendly, hence why remaining in compliance with the IRS is so challenging for many. This article attempts to review the online US tax preparation software options for Americans abroad in 2023. I will try to clarify the options available in the market including free, low cost, and paid options.
A guest post originally published here.
One of the things I hear from Americans abroad all the time is that they feel very alone and lost when they discover that they’re supposed to be filing a US tax return. The part of the IRS website for international taxpayers is difficult to find and understand, especially for someone that’s new to filing US taxes from outside the US, has lived abroad for a long time, or never lived in the US at all. The US State Department pulled Tax Attaches from Embassies around the world in 2013 due to lack of funding. I’ve heard anecdotally that some embassies will tell you about your tax filing obligation when you renew your passport, but other embassies don’t say anything. It’s clear there’s no consistent message going out from the embassies, if there’s any messaging at all.
Depending on what country and where you live in the world, there might be a local American club in bigger cities to converse with fellow Americans (and most people aren’t there to talk about taxes!) but for people living in remote villages or in the countryside, it’s rare to encounter other Americans or have anyone to talk to or seek help from for fulfilling their complicated US tax filing obligation. So, more often than not, Americans abroad turn to online communities to connect and seek answers to the labyrinth that is US taxes for Americans abroad. This article attempts to summarize the online communities on Reddit and Facebook available for local accountant recommendations, help with filing, and other issues relevant to an American abroad and dual citizens’ US tax obligations.
A guest post originally published here.
As the international member of the Taxpayer Advocacy Panel (TAP) I am frequently contacted by international taxpayers requesting information on how to contact the IRS to ask questions or to resolve an issue. Most issues with the IRS can and should easily be resolved with a phone call. This article attempts to explain how taxpayers with a U.S. tax obligation can best go about contacting the IRS by phone from outside the U.S.
How the IRS Communicates with Taxpayers
It’s first useful to review how the IRS will not communicate with you.
The IRS will never contact you by:
- social media
- text message
The IRS can contact you by:
For people living internationally, the most common form of contact from the IRS is by regular mail. Generally, the IRS will send you several letters in the mail about the same issue. However, mail is not always a reliable source of communication for people living outside the U.S. and so one of the most frequent complaints I hear is that people don’t receive a letter that the IRS said was sent to the taxpayer. It is frequent for letters to get lost or are delivered after a deadline the IRS is asking the international taxpayer to meet in the letter itself.
It is unfortunate that the IRS has not improved its technology infrastructure to support e-mail or video calling customer support for international taxpayers, because these are much more reliable and more frequently used methods of communication for people living internationally these days. The good news is that the IRS is looking at options and trialing e-mail and online customer service options, but there isn’t a set date for when these communication options will be made available. In the meantime, we have to rely on current methods of communication with the IRS.
Taxpayers can contact the IRS by 3 different means:
It was highlighted in the 2022 National Taxpayer Advocate’s Most Serious Problems report that “Unlike domestic taxpayers who have access to a variety of toll-free lines, the IRS provides one telephone line for taxpayers outside of the United States, and it is not toll-free.”
I have received reports from international taxpayers who have tried to call the International Taxpayer Service Call Center who were unable to get through only to be hung up on or cut off after waiting on hold for hours. Keep in mind though that this feedback is consistent with feedback about calling the IRS in general, not just with people calling internationally, so it’s not an issue specific to international callers but it does exacerbate the problems people internationally experience with communicating with the IRS. Making calls to the IRS from outside the United States can be costly for people and so the following tips will hopefully reduce your costs and wait time if you need to call the IRS.
We need your help this week. You can really make a difference!
Step 1: Find your two Senators’ and one Representative’s phone numbers
- Click here and search for your last US address or your US voting address, or your parents last US address if you have never lived in the US.
- Grab the Washington D.C. phone numbers (area code 202) for all three members.
Step 2: Call their offices!
- Call first, in order to identify the correct person to send your email to.
- When receptionist answers, read the following script:
Hi, my name is [name], I am a constituent and I would like to send a copy of a recently released report on tax problems for Americans abroad to the person in charge of tax on the Congress[wo/man]'s legislative team. This is an issue that matters to me since I live abroad in [country]. Could you tell me his or her email address so I can send a copy of the report?
- Call during Washington D.C. office hours (9am to 5pm ET, weekdays) to increase your chances of success.
- Do not leave voicemail. After three unsuccessful attempts, email us at [email protected] and we'll see if we can help.
- Call your House representative first if you don’t have time for all three.
- Minimum credit (usually about $5) can get you connected through any internet device to reduce costs if you cannot make an international call.
Step 3: Send a separate email to each Member’s tax staff
If you do not receive a reply within 24 hours, send a follow-up email.
- Ask for confirmation that they received your email for their records (1-2 minutes of your time).
- Message them on their social media platforms to help bump your email up to the top of their inbox.
- If the Congressional staff requests additional information or wants to speak to you about the report but you're not confident in doing this, reply that writers of the report will be happy to speak with them (forward us the email and then we'll advise you on next steps)
- If you receive any reply, please forward it to [email protected] so we know how the member's office responds.
Thank you so much for helping us with this very important work.
- If you have any questions on this action, please email us at [email protected].
- Feel free to share this webpage with anyone you think is interested in helping fix the tax problems for Americans abroad!
Response from Democrats Abroad Taxation Task Force to IRS Notice 2023-11: Temporary FATCA Reporting Relief for Non-U.S. Banks
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.
Announcing the release of the 2022 report on tax and financial access issues for Americans abroad!
Thank you to all that participated in the tax survey earlier this year! This report is a summary of what you shared about your tax and financial access issues. Overall, your feedback confirmed the compounding effect of tax discrimination, unintended consequences, and banking rules and regulations impose a substantial burden on Americans abroad.
A BIG thank you to the 40+ volunteers who contributed both big and small to this report. This report is nearly 2 years in the making, and we're very excited that it's now publicly available for all to read. Our hope is that this report will be an effective advocacy tool for the upcoming 118th Congress, and we look forward to engaging in productive conversations with Congress in 2023 to further our advocacy efforts for tax reform.
Please send any questions or feedback on the report to [email protected]
Your help is needed this week! Contact your Members of Congress and ask them to read the 2022 Update on Tax and Financial Access Issues of Americans Abroad. This report is based on the 7,000 Americans abroad who filled in the tax survey in April this year, so this is helping your voice be heard in Congress! Now that the report is available, your help is needed to make sure that all Members of Congress are made aware of it and receive a copy.
This action will only take *20 minutes* and will greatly help us advance our advocacy goals!
Follow these 3 Steps -
1. Find your 2 Senators and 1 House Representative's Washington D.C. office phone numbers
- Click here and search for the last address you lived at in the U.S. or your U.S. voting address (if you've never lived in the U.S., use the last address your American parent(s) lived).
- The page should list the Washington D.C. phone numbers for all three of your Members of Congress (they will start with area code 202).
2. **CALL** their offices
We want you to call, not email, because calling is generally more effective than emailing to get the correct name.
- When the receptionist answers the phone read the following script:
Hi, my name is [insert your name here], I am a constituent and I would like to send a copy of a recently released report on tax problems for Americans abroad to the person in charge of tax on the Congress[wo/man]'s legislative team. This is an issue that matters to me since I live abroad in [country]. Do you know who would be the best person to send a copy of the report to?
- If you don't have a usual method of calling the US, we recommend adding the minimum credit (usually about $5) to a Skype account so you can call through any device connected to the Internet. This will greatly reduce your costs to make an international call.
- You'll need to call during Washington D.C. office hours to increase the chances of you getting a person to answer the phone, between 9am to 5pm ET on weekdays.
- The person on the phone should then give you the email address for the correct person of staff in charge of tax legislation.
- If when you call, the phone goes to voicemail or no one answers, try again another time, don't leave a voicemail. If you call up to 3 different times and you don't have any luck email us on [email protected] and we'll see if we can help.
- If you don't have time to call all 3 and you only want to make 1 call, then call your House representative.
3. Now send 3 separate emails!
- Copy, paste, and customize the following email (send the same email to each Member of Congress, do not just send one email to all 3).
- And attach to each email the one page summary and report here.
To: Tax staff email
Cc: [email protected] (this is very important, don't forget to cc us so that we know that you contacted your reps! This helps us track who contacted whom.)
Dear [Tax staff's first and last name],
My name is [your name], I am a proud constituent living in [city and country you live in].
[Please add your own personal story about how you've been impacted by tax and financial access issues. The more personal, the better.]
Solutions to these issues of concern to the estimated nine million(!) Americans abroad are non-controversial and bipartisan. With the 118th Congress just around the corner, fixing these problems could garner bipartisan support.
Please find attached a one pager and copy of a recently released report on Americans abroad tax and financial access issues. Can you please add this report to your records? Can you also include this in the briefing material for the Congress[wo/man] for the next Congress?
If you do not receive a reply in 24 hours, send a follow-up email asking for them to confirm that they received your email for their records (which will only take 1-2 minutes of your time):
- If the Congressional staff requests additional information or wants to do a call with you about the report but you're not confident in doing this, reply and cc in [email protected] and say that someone in Democrats Abroad will be happy to speak with them.
- If you receive any reply, please forward it to [email protected] so Democrats Abroad knows how the member's office responds to your request.
- Don't be afraid to message them on all their social media platforms to ask if they saw your email too - offices are very busy and get hundreds of emails a day so this helps bump your email up to the top of their inbox.
- If you can't send an attachment to your email, use these links to share the report:
- For the report: https://www.democratsabroad.org/taxreportpdf
- And for the one pager: https://www.democratsabroad.org/taxreportonepagerpdf
Click here to watch a quick video on how to participate in this campaign to help you save time!
That's it! Thank you so much for helping us with this very important work. If you have any questions on this action, please email us at [email protected].
Feel free to share this website page with anyone you think is interested in helping fix the tax problems for Americans abroad!
Please RSVP here for a quick webinar to assist you in contacting your House Democratic candidates to ask that they fill in the Americans abroad issue questionnaire. This webinar is optional, if you are confident enough in contacting your Democratic House candidate please proceed with the instructions here.
WHEN: Friday, September 23, 2022 View in your time zone
|4:00am New York|
WHERE: Zoom call
RSVP below, and we will send you an email with access details.
Add event to calendar
We need your help this week! Contact your House Democratic candidate to fill in the Americans abroad questionnaire before overseas absentee ballots go out this Saturday.
This action will only take *20 minutes* and will greatly help us advance our advocacy goals!
1. Click here to see if your candidate has already answered the Americans abroad questionnaire.
If they've already answered the questionnaire, then you're done! But if they're still missing, carry on to Step 2.
2. Find your Democratic House candidate's e-mail
- Click here and use the ballot look-up tool to search for the last address you lived at in the U.S. (if you've never lived in the U.S., use the last address your American parent(s) lived).
- Click through to view the ballot for the November 8 election and scroll down to view your Democratic candidate for "U.S. House". Click on their name, and it'll take you to the candidate's info page - on the right side you'll see the info box and at the bottom of it will be their contact section which will look like this:
- Click through to the campaign website (NOT the official website, if they're an incumbent House rep) and search on the page for the email address (note, not all campaigns have an email address, many will have a contact form on their website, you will contact them using this if you can't find their email address). If their website doesn't have their email, check their social media about or contact pages - sometimes they list their contact details there.
3. Email your Democratic candidate
- Note: you may not find an email address on the candidate's website so you may have to contact the candidate using their contact form on their website. If this happens, please email [email protected] to let us know which candidate you contacted so we keep track of who has contacted whom.
- Copy and paste and customize the following email:
To: Candidate's email
Cc: [email protected] (this is very important, don't forget to cc us so that we know that you contacted your candidate! This helps us track who contacted whom.)
Dear [Candidate's first and last name],
My name is [your name], I am a proud [your state-district] voter living in [city and country you live in].
Would you please answer this Democrats Abroad questionnaire before the voter registration deadline on October 11? Here's the link: http://www.democratsabroad.org/housequestionnaire
Democrats Abroad will then publish your answers on democratsabroad.org/2022_midterms You can see a number of answers from incumbent and non-incumbent candidates already published on the website. Although voting for stateside Americans isn't until November, voting from abroad has already started. So the sooner your response is received, the sooner this will help you get more overseas absentee votes for your race.
Americans abroad issues are non-controversial and bi-partisan, so answering the questionnaire won't take any time at all and is an easy win-win!
Please let me know if you have any additional questions. I look forward to seeing your answers published on the Democrats Abroad website.
If you do not receive a reply in 24 hours, send a follow up email asking if they received your email or if there's another email address you should contact (which will only take 1-2 minutes of your time):
- If the campaign or candidate requests additional information or wants to do a call with you about the questionnaire but you're not confident in doing this in cc in [email protected] and say that someone in Democrats Abroad will reply.
- If you receive any reply, please forward it to [email protected] so Democrats Abroad knows how the candidate's campaign responded to your request.
- Don't be afraid to message them on all their social media platforms to ask if they saw your email too - candidates are very busy and get hundreds of emails a day so this helps bump your email up to the top of their inbox.
If you'd like to participate in the campaign but you're struggling or not sure how to follow the steps, we'll be offering a drop-in webinar this Friday at 10am Paris time to help advise how to find contact details, send the email, respond to answers from campaigns, and anything else related to contacting candidates to answer the candidate questionnaire. Be sure to click here to RSVP and join us for this additional help.
That's it! Thank you so much for helping us with this very important work. If you have any questions on this tiny action, please email us at [email protected].
Feel free to share this website page with anyone you think is interested in helping elect more Democrats and wants to fix the tax problems for Americans abroad!
To the Editor Re: Next, the Supreme Court Decides How to Punish US Expats. 8/26/22
Andreas Kluth admirably summarizes the uniquely unfair way the U.S. tax system handles citizens living abroad. Left unaddressed, however, was the most important part of the solution: voting. If Americans abroad, and Americans at home justifiably concerned with the challenges faced by fellow citizens abroad, wish to generate adequate political will and legislation (i.e. the residency-based tax system employed by almost every other country) to address these challenges, they must vote for legislators who take the issue seriously.
Further, Americans abroad must be made aware that their tax status isn’t a barrier to voting - casting a ballot will not get you audited by the IRS! The 24th Amendment and Overseas Citizens Voting Rights Act protect our right to vote, regardless of location, duration of time abroad, origin of our citizenship, or the status of our taxes. Americans abroad (many of whom don’t vote specifically for fear of tax consequences) must participate in all U.S. elections, especially this year’s midterms. If more of us vote, Congress will no longer be able to ignore a constituency larger than the population of all but 11 states, and address these antiquated laws that don’t work in an increasingly globalized world.
Chair, Democrats Abroad Taxation Task Force
London, United Kingdom