May 14-16 Expat Tax Reform meetings with Congress: clarifying the way forward for RBT

Democrats Abroad was on Capitol Hill again on May 14-16 for meetings with Congress about legislation to enact a switch from our current system of Citizenship Based Taxation to Residency Based Taxation (RBT).[1]  Across the three days we held 18 meetings, 12 of which[2] were with members of the all-important Congressional tax-writing subcommittees[3] and so featured detailed discussion of the design elements of an RBT bill.  Of course, we always discuss the circumstances faced by Americans abroad being subjected to taxation in two (or more) jurisdictions and the personal and financial cost of maintaining U.S tax compliance.  The research data and case studies we present are critical to our efforts to underscore the urgent need for reform.

Twelve of the meetings were with House members; six were in the Senate.  Ten meetings were with Democrats; eight meetings were with Republicans.

Further to our previous reports, we continue to engage closely with Rep. George Holding’s team who lead the work to develop legislation to enact RBT in the 115th Congress.  They continue to demonstrate commitment to introducing a bill that can generate bi-partisan support in both houses.  Our work this year has focused on building support for the RBT proposal amongst other Ways and Means Committee members who can partner with Holding through the arduous legislation-writing process. 

It is our view (and the view of others) that Rep. Don Beyer (D-VA 8th district), is an ideal partner in fighting for RBT given his service on the Ways and Means Committee and his years of experience living abroad.  We understand discussions have occurred between Holding and Beyer and we continue to encourage Rep. Beyer as well.  When we met with the Congressman in March his support for RBT was in evidence.  When we met on Thursday with the Rep. Beyer’s Legislative Director (3rd time in 12 months) he voiced reasonable concerns.  The benefits of the 2017 Tax Cuts and Jobs Act (TCJA) were highly skewed towards large corporations and the wealthy; many Ways and Means Democrats have this same concern about RBT -  in addition to the concern that RBT will be exploited by wealthy Americans to use real or faux offshore residency in order to move assessable income out of the reach of the IRS.  We describe the anti-avoidance provisions in the RBT proposal to address the latter and use our research on the Americans abroad community to address the former.  Unlike the TCJA, the key beneficiaries of RBT will be predominantly middle-class Americans living abroad, as they vastly outnumber overseas earners making more than the Foreign Earned Income Exclusion.  

Perhaps the most persuasive arguments in support of RBT, however, come from the stories and case studies of affected Americans abroad.  This week (May 20, 21) the global leaders of Democrats Abroad are in Washington DC and, following on from our annual general meeting held in DC May 17-19, they will be on Capitol Hill talking to Congress about issues impacting Americans abroad.  By a wonderful coincidence, there are four DemsAbroad leaders participating in the 2019 DemsAbroad Congressional Door Knock who vote in Virginia’s 8th District, the seat held by Rep. Don Beyer.  We have arranged a meeting for them with Rep. Beyer and expect them to present compellingly about the personal and financial burden Citizenship Based Taxation places on them, including how it makes creating financial security in retirement so incredibly difficult.  We are hopeful that this week we will move another step closer to having bi-partisan support for RBT legislation in the House. 

What happens next?

While the proposal introducing RBT could take a number of different paths to becoming a bill, we understand that hearings may be required to document the tax problems of Americans abroad and discuss a legislative remedy.  We expect that the bi-partisan Ways and Means Committee RBT leaders would create a consensus view on the RBT design elements, incorporating advice from Legislative Counsel serving the Ways and Means Committee.  The resulting RBT proposal would go to the Joint Committee on Taxation to be scored (i.e. to quantify the impact the legislation would have on the federal budget).  In an ideal world the bill would be “revenue neutral” (as then it could be more easily welcomed as an amendment to another piece of tax legislation that has more momentum in getting to the floor for a vote).  The Ways and Means Committee Legislative Counsel would put the proposal into the language of a draft RBT bill; the draft bill could then be shared with members of the House and Senate in order to attract co-sponsors.  

Democrats Abroad and the other organizations representing Americans abroad have been meeting with elected representatives about expat tax reform for years.  We have a ready list of members who we believe will support an RBT bill enacting legislation that predominantly benefits ordinary, middle-class Americans abroad and includes robust anti-avoidance mechanisms to protect the law from abuse.

So, the work is far from over. 

In our meeting with the Committee’s Legislative Counsel we were advised a bill could be introduced as early as the beginning of 2020.  Of course, election year politics bring their own surprises, distractions and legislative priorities, which makes it difficult to know what timeline is realistic.

Democrats Abroad’s tax advocacy work will continue to focus on generating bi-partisan Ways and Means Committee support for an RBT bill and on Congressional outreach to both parties and both houses to continue to build the profile of this important reform.  In our meetings with Congress we also discuss the need for: an exemption from all FATCA reporting for the accounts of Americans abroad in their countries of residence; relief for Americans abroad from the “transition taxes” in the 2017 TCJA; reforms to the administration of FBAR, including changes to the enormously out-of-proportion penalties for non-willful non-compliance; establishment of a Commission on Americans Abroad; repeal of the Windfall Elimination Provision; and a more reasonable renunciation mechanism for “Accidental Americans”.

Shortly Democrats Abroad will also be reaching out to those who have declared their candidacy to be the Democratic Party nominee for president of the United States to seek their positions on issues such as taxation, voting and immigration as they uniquely impact Americans abroad.

We will continue to report out on our initiatives, and developments in our work and the work of the other amazing organizations representing Americans abroad.  We are grateful for their camaraderie and their commitment to improving the lives of all in the Americans abroad community.

Please send comments or questions to [email protected]

Democrats Abroad Taxation Task Force


[1] Under a system of Residency Based Taxation Americans living and working abroad would will be required to continue to declare their U.S.-sourced income to the IRS but would not be required to declare and pay tax on the income generated in another country.

[2] The balance of the meetings were with “friends of DA” i.e. members of Congress who support our work on behalf of the Americans abroad community and who we engage with regularly in order to keep them up to speed on our work.

[3] The Select Revenue Measures Subcommittee of the House Ways and Means Committee and the Tax Policy Subcommittee of the Senate Finance Committee.

Dems Abroad residency based taxation meetings with Congress 14-16 May - Time to call your members

The Democrats Abroad Taxation Task Force is back on Capitol Hill on 14, 15 and 16 May putting tax reform for Americans abroad at the center of discussions with Congress.   We have meetings scheduled with members in both Houses of Congress and on both sides of politics.  We will be discussing the need for residency based taxation and the design elements of the proposed legislation to enact it.  

We need those determined to see this important reform enacted to reach out to their members of Congress this week and next week to demand it.  Please consult this grassroots campaign guide for background on our advocacy work and for sample language you can use to call or write to Congress.

Please send questions to [email protected]

Democrats Abroad publishes 2019 Expat Tax Research Datapack

Democrats Abroad is pleased to make public the data obtained in our 2019 research into the experience of Americans abroad complying with U.S. tax filing and financial account reporting requirements.

Click here to download the DATAPACK of the Tax Filing From Abroad Report.

Click here for the full Tax Filing From Abroad report. 

Click here for a summary of the findings.

We hope this information will be useful to the many organisations and individuals working hard to persuade Congress to make urgently needed reforms to the way the U.S. tax code impacts Americans living outside the U.S.

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March 2019 meetings with Congress about expat tax reform

The DemsAbroad Taxation Task Force is pleased to report back about our expat tax reform meetings last week (the week commencing 4 March 2019) on Capitol Hill.  Thanks to Carol Moore of DAUK for joining us for the meetings.

Work continues on a bill implementing a switch to Residency Based Taxation

As followers of this issue know, the residency-based taxation (RBT) bill introduced by Rep George Holding on the last sitting day of Congress in 2018 was lacking in the detail needed to generate the support it needs to be enacted.  However it was a great milestone for RBT activists and an important signal to us all that a powerful member of Congress is committed to an expat tax reform that would provide genuine relief to ordinary Americans living and working abroad.

We understand from Holding’s team that they are back at work with the Ways and Means Committee lawyers drafting the bill, and with the analysts on the Joint Committee on Taxation who are scoring the proposal (to establish the impact on the federal budget).  Holding's team expects to introduce another version of the Tax Fairness for Americans Abroad Act in the 116th Congress in the coming months and we support their work to see more of the detail we spent so much time developing through 2018 in the next version of the bill.

But you don’t have to take our word for it.  Rep Holding’s tax counsel, Matt Stross, will feature in a Webcast about the Tax Fairness for Americans Abroad Act hosted by our colleagues at American Citizens Abroad taking place on Wed 13 March and Thurs 14 March.  Click here for information and to register to attend.  Bring your questions and don’t forget to thank Matt.  He has worked very hard on this proposal and deserves our gratitude for his endeavors and his commitment to getting it done!

Building support for RBT across the House

We also met with the other members of the House who we know are our allies in expat tax reform:  Rep Carolyn Maloney (Americans Abroad Caucus co-chair); Rep Jamie Raskin (former member of DA France); Rep Dina Titus (former American abroad, very good friend to Democrats Abroad and featured speaker at our 2016 Global meeting in Berlin); and Rep Don Beyer (former U.S. Ambassador to Switzerland).  They are fully across work on the bill and, now that Democrats have control of the House, we expect them to become more hands-on with it.

Meetings with other members of the tax writing subcommittee of the House Ways and Means Committee suggests our band of mission-critical allies is about to grow.  We will give those members some time to develop an understanding of the reform and will be happy to share their names in due course.

What else

We understand that Rep Carolyn Maloney will be reintroducing the Overseas Americans Financial Access Act which would exempt from FATCA reporting all accounts of Americans abroad in their countries of residence and also reintroducing her bill proposing the establishment of an Americans Abroad Commission to examine the range of U.S. laws and regulations that have an unfair, adverse impact on Americans abroad.   If such a commission were in place then Congress might avoid inadvertently enacting laws that harm Americans who live outside the U.S., such as the Tax Cuts and Jobs Act (TCJA) which gave rise to the Transition Taxes which are seriously hurting Americans who own foreign registered companies.[i] 

The TCJA introduces two Transition Taxes: the Repatriation Tax and Global Intangible Low Tax Income (GILTI) tax.  Despite a year of activism, we are still waiting for some Repatriation Tax relief, other than the one-year deferral to start making payment.  The GILTI Tax, however, was the subject of new Treasury regulations introduced when we were on the Hill last week.   The rules change gives individual owners of foreign registered companies access to the same offsets and discounts afforded to US-based corporate owners of foreign registered companies.  Electing to be taxed as a corporation, however, could for some result in greater levels of taxation in the long run.  American owners of foreign-registered companies should consult their tax professional.

What’s next

Our expat tax advocacy team is back on Capitol Hill the week of Monday 8 April and again the week of Monday 13 May, having more meetings with law makers key to the development of the bill and the development of support for it.  Whilst normally we see members in both houses, the March 2019 meetings focused on the House where the in-the-weeds work on RBT is going on.  Our outreach will accordion out again to include the Senate next month. 

We can’t underestimate the importance of outreach by Americans abroad to your elected officials about expat tax reform.  If you’re looking for advice on how to contact your member please refer to this Guide.  It gives you everything to know about how to contact your member and what to say/write to them once you do.

Democrats Abroad Taxation Task Force

[email protected]




[i] The TCJA introduced territorial taxation for corporations giving them a deeply discounted tax rate on the repatriation of unrepatriated of profits.  It also imposed deemed repatriation of profits on Americans abroad who own foreign registered companies, many of whom never intended to repatriate the profits (and who are already paying taxes in the jurisdiction where the company is registered.)   These business owners living and working abroad are having to put their hand on many thousands of dollars to pay the retroactive Repatriation Tax on profits going back to 1986.  Catastrophic for many.

The TCJA also places a new tax on the future profits of foreign registered companies, with offsets and discounts for US-based corporate owners of foreign registered companies but none for Americans abroad who own foreign registered companies. 

Democrats Abroad is back on Capitol Hill to discuss tax reform for Americans abroad this week.

A delegation of Democrats Abroad is in Washington DC this week meeting with members of Congress to share the results of our 2019 research on Americans abroad facing US taxation and continue discussions about legislation enacting a switch from our current system of citizenship based taxation to residency based taxation.

In our Leave Behind Pack is a summary of the findings of the research and a document making the case for RBT.  

Residency Based Taxation activists are asked to reach out this week to their members of Congress in support of expat tax reform.  Please refer to this grassroots campaign guide for reaching out to Congress about expat tax reform, which has scripts for calls and language for writing messages.

Please send questions and comments to [email protected]

Democrats Abroad supports a remedy for "Accidental Americans"

Democrats Abroad has written to Congressional leaders in support of a citizenship renunciation mechanism for "Accidental Americans".   Download the letter here.

Please send questions or comments to [email protected]

Tax Filing From Abroad: 2019 Research on Non-Resident Americans and U.S. Taxation

Democrats Abroad is pleased to present its fourth major research project on the experience of Americans living and working abroad facing the challenges of a range of U.S. tax, financial account reporting, banking, securities and other laws that discriminate against them as non-resident citizens:  Tax Filing From Abroad:  Research on Non-Resident Americans and U.S. Taxation.

The key findings of the research are summarized below. The report includes not only the survey data but also comments from research participants that expand on the numbers. Download the full report here.

We will use the findings to profile the Americans abroad community to lawmakers and regulators in discussions aimed at persuading them to enact reforms to laws and regulations that place an unfair and undo burden on Americans abroad.  We hope the data is useful to all those advocating on behalf of the Americans abroad community.  To that end we will be publishing a Datapack of the raw data collected in the survey undertaken in January 2019.

Please send questions and comments to [email protected]


Key findings of the Democrats Abroad 2019 research on Non-Resident Americans and U.S. taxation:



 moved outside the U.S. for marriage/a relationship or work/employment


are living abroad indefinitely


 have serious problems addressing their US tax filing obligations


 hire tax return professionals to prepare their filings


 pay more than $500 for tax filing services, 34% pay more than $1,000


One in three incur personal and financial harm by discriminatory tax code treatment


 receive foreign government social welfare payments, which are fully US taxable even if they are not taxed locally


have been refused foreign financial products


have been denied U.S. investment/brokerage products


 employed by a company in which they own a majority interest; these are entities are affected by the 2017 Tax Cuts and Jobs Act (TCJA) Repatriation Tax and GILTI tax


 Indicate they are personally impacted by the TCJA Transition Taxes, suggesting the impact is felt by the spouses/family of the business owners.


 Receive U.S. social security benefits

One in six SS beneficiaries have their benefits reduced by the Windfall Elimination Provision


 Have payments reduced by more than 25%


 Say WEP reductions make a modest to very big impact on their household budget


Identify as Accidental Americans


 of them would like to renounce their U.S. citizenship, but most would only do so if they could renounce at a reasonable cost, effort

In memory of Lucy Stensland Laederich, champion for Americans Abroad

Democrats Abroad wishes to express heartfelt condolences to the family and friends of Lucy Stensland Laederich, of the Association of Americans Resident Overseas, Paris (AARO) and the Federation of American Women's Clubs Overseas (FAWCO) and to acknowledge Lucy's profound contribution to the Americans abroad community. Lucy was a greatly respected and valued colleague of all those working to advance the interests of Americans living and working outside the U.S., especially in the area of tax reform for Americans abroad. We celebrate her life and achievements and recognize the contribution she made to our community.

2019 Non-Resident Taxation Research - SURVEY NOW CLOSED

Many thanks to all those who have made submissions to our 2019 Non-Resident Taxation Research Project over the two week study period.  The survey was closed at midnight on Sunday February 3, 2019.  We look forward to publishing a full report on the findings of the research by the end of February.  


Democrats Abroad is launching our 2019 Non-Resident Taxation Research Project to generate information we will use to advocate for reforms to relieve the burden of tax, banking, financial account reporting, securities and other laws that discriminate against Americans living abroad. Please contribute to our research by filling out this questionnaire. It will be open for submissions for 2 weeks, closing at midnight US EDT on Sunday February 3, 2019.


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Democrats Abroad Expat Tax Reform Advocacy - 2018 Year in Review

As each year passes our list of expat tax issues grows.  As followers of expat tax matters know, there was nothing good for Americans living abroad in the Tax Cuts and Jobs Act of 2017.  Not only did the law fail to address any of the tax problems Americans abroad endure, it also placed a further serious - and for many existential - tax burden on Americans who own small to medium sized businesses overseas.  For these reasons you could say 2018 was the most challenging year yet for expat tax reform activists, many of whom invested enormous energy advocating on behalf of the Americans abroad community during the 2017 tax writing process.

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