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?
Please contact [email protected] to arrange a meeting with the authors who can walk you through the report and currently introduced legislation available to co-sponsor.
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
H.R.5799 Overseas Americans Financial Access Act submitted as an amendment for H.R.4350 National Defense Authorization Act for Fiscal Year 2022
Congresswoman Carolyn Maloney (NY-12), founder and co-chair of the Congressional Americans Abroad Caucus, has filed an amendment to H.R. 7900 - National Defense Authorization Act for Fiscal Year 2023. The amendment is the same bill text as H.R. 5799 - Overseas Americans Financial Access Act. This is also known as the FATCA same-country exception.
What is H.R. 7900 National Defense Authorization Act for Fiscal Year 2023?
This bill authorizes FY2023 appropriations for military activities and programs of the Department of Defense (e.g., personnel; research, development, test, and evaluation; and procurement of items such as aircraft, missiles, and ammunition). It also prescribes military personnel strengths for FY2023.
What is H.R. 5799 the Overseas Americans Financial Access Act?
The aim of the bill is to relieve the unintended burden imposed by the Foreign Account Tax Compliance Act of 2010 (FATCA) on American citizens living overseas by directing the IRS to exclude from FATCA reporting financial accounts held by American citizens in countries where they are bona fide residents.
What the bill does:
- Amends FATCA reporting requirements to exempt Americans who are “qualified” under U.S. Code § 9119(d) (i.e. they’re bona fide residents of the foreign country where their tax home is) from having to report on their bank accounts.
- Reduces the compliance burdens on U.S. citizens, who currently must either file complex, additional forms themselves or pay higher tax return preparation fees.
- Reduces the compliance burdens on FFIs, some of which are declining to do business with U.S. citizens because of the significant costs and regulatory risks associated with ongoing FATCA compliance.
What the bill does not do:
This bill does not exempt qualified individuals’ foreign financial assets other than financial accounts maintained by foreign financial institutions from FATCA reporting requirements.
- The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 to crack down on tax evasion by requiring that foreign financial Institutions (FFIs) report on the foreign assets held by their U.S. account holders.
- This legislation was critical for closing loopholes in the U.S. tax system, but had unintended consequences on American citizens living and working overseas.
- Because of the burdensome reporting requirements and steep sanctions for violations, some FFIs have closed accounts or refused to open new ones for S. citizens in order to minimize exposure to FATCA reporting requirements, withholding fees, and potential penalties.
- This practice leaves law-abiding American citizens without access to everyday financial services such as mortgages, bank accounts, insurance policies and pension funds -- all of which are critical services regardless of place of residence.
Why is the introduction of this bill as an amendment significant?
Any kind of legislative movement indicates interest and appetite within Congress to advance and change law. The fact that this has been submitted as an amendment helps build momentum behind the policy and advance it through the many steps required to advance legislation and make it into law.
More information on this legislation:
- Click here to download a pdf of the amendment.
- Click here for H.R. 7900 National Defense Authorization Act for Fiscal Year 2023
- Click here for H.R. 5799 the Overseas Americans Financial Access Act
News coverage on this case:
- https://www.taxnotes.com/fatca-expert/fatca/defense-bill-amendment-would-offer-fatca-same-country-exception/2022/07/11/7dmvb (Behind paywall)
Sign up for the Democrats Abroad Taxation Task Force mailing list by clicking here.
Statement from the Democrats Abroad Taxation Task Force on Supreme Court’s decision to weigh in on FBAR non-willful penalty limit
On June 21, the Supreme Court agreed to hear a case regarding the maximum penalty for non-willful violations of the FBAR (Foreign Bank Account Reporting).
What is the FBAR?
All Americans, whether living inside the U.S. or outside the U.S., whether dual citizen or only holding U.S. citizenship, regardless of age or income level, must report to FinCEN (the Financial Crimes Enforcement Network, a division under the U.S. Department of the Treasury) their non-U.S. financial accounts – such as bank accounts, brokerage accounts, and mutual funds – via the Foreign Bank Account Report or FBAR, Form 114. Per the Bank Secrecy Act, you must file an FBAR if the aggregate value of those non-U.S. financial accounts – measured at their highest balance during the year of reporting – exceeds $10,000.
How is the FBAR problematic for Americans abroad?
Issues the FBAR causes for Americans abroad, include but are not limited to:
- The filing threshold of $10,000 is too low. The threshold was set in 1970 when the Bank Secrecy Act was passed. The Act’s intention was to prevent money laundering, tax evasion, or other criminal activities, and tracking overseas financial accounts was an enforcement method. However, at today’s level of purchasing power, $10,000 is worth $75,000. Democrats Abroad advocates for the threshold to be adjusted for inflation.
- Poor communication from the Department of the Treasury to Americans abroad that the form exists and how to file it. Filing follows a multi-step online process which is completely separate from tax-return preparation and filing, and many professional tax preparers do not routinely ask questions that would identify whether an individual has a filing requirement. This results in low compliance from Americans abroad.
- FBAR filings largely duplicate the information collected by the IRS on Forms such as 8938 (“Statement of Foreign Financial Assets”), 8621 (“Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund”), and 3520A (“Annual Information Return of Foreign Trust with a U.S. Owner”). In addition to that duplicate information, FATCA requires Foreign Financial Institutions to file Form 8966 disclosing balances and income associated with accounts owned by U.S. citizens.
- Penalties are not commensurate with non-failure to file the FBAR. The standard fine is $10,000 per year for non-willful failure to file. Whether this penalty is calculated per form or per account is the issue at question in the Supreme Court case.
General fear mongering from the government and the tax-preparation industry to comply. The specter of being penalized leads to fear, uncertainty, and doubt for many middle-class families as they attempt to navigate their legal and tax obligations.
What is Bittner v. United States?
Alexandru Bittner is a dual U.S.-Romania citizen who was living in Romania during 2007-2011 and failed to file the FBAR for that period. In 2019 the IRS penalized him $2.7 million, on the basis that he had breached the law 272 times, once per account in each of those five years. Bittner argues he breached the law at most 5 times, once for each year he failed to file, therefore owing a $50,000 fine.
A federal judge in Texas ruled that Mr. Bittner was liable for $10,000 for each form that he failed to file per filing year – not each account – therefore capping the penalty at $50,000. This agreed with an earlier ruling by the Ninth Circuit – in U.S. v. Jane Boyd – where Boyd was found liable for $10,000, instead of $50,000, for failure to report 5 accounts.
But in November 2021 the Fifth Circuit disagreed. This circuit split set up the Bittner case to be heard by the Supreme Court and stands to have a significant impact on how penalties may be assessed in the future.
Democrats Abroad Stands with Bittner
The U.S. Chamber of Commerce, the Center for Taxpayer Rights, and the American College of Tax Counsel have all filed amicus briefs in support of Bittner in the case. An amicus brief is usually filed by a person or entity who is not party to the case but has an interest, in order to present additional information for the justices to consider. Although Democrats Abroad considered filing an amicus brief for this case, the existing amicus briefs already cover arguments DA would have put forward, therefore we are announcing our support of those briefs rather than filing a duplicate brief.
Democrats Abroad welcomes the Supreme Court’s decision to hear this case as a means to clarify the assessment of FBAR penalties for Americans at home and abroad. Clarity on the maximum amount of the non-willful penalty will be beneficial to Americans abroad who fear that even inadvertent tax compliance mistakes could result in egregious penalties.
In addition, DA continues to advocate for a residence-based taxation system and an exemption from FATCA-reporting for accounts held in the country that an American lives in. These legislative fixes to U.S. laws would enable all Americans abroad the opportunity to participate fully in lawful financial activities no matter where they live.
More information on the Supreme Court’s decision to hear the case is available here:
More news coverage on this case:
- https://www.law360.com/tax-authority/federal/articles/1504524 (Behind paywall)
The Democrats Abroad Taxation Task Force will be meeting with Congressional Leaders in Washington DC next week to discuss tax advocacy priorities including but not limited to residency based taxation, simplified filing, FATCA reform, and GILTI.
The team is currently very busy confirming meetings and preparing for the visit.
Many offices are not doing in-person meetings due to COVID, and so virtual meetings are being scheduled for the week of June 13.
A summary of progress made during this concentrated effort of tax advocacy will be shared later in June.
Democrats Abroad hosted its annual global meeting on May 21-22. On the agenda, Saturday was allocated for presentations focused on mobilizing the overseas vote in this critical midterm election year, while Sunday's agenda focused on internal business.
3 hours of the Sunday internal business agenda included voting on resolutions and charter amendments.
The DA charter amendments are updates and changes made to the document that outlines the rules that DA follows as an organization. There were 8 on the agenda to be voted on.
DA resolutions are broadly, statements made regarding policy and positions where DA stands as an organization. There were 11 on the agenda to be voted on.
On Sunday, 5 non-controversial resolutions were voted on as a package as the first agenda item in the 3 hour period, in an attempt to save time. All 5 of these resolutions passed.
The remaining amount of time on Sunday was spent discussing one particular resolution to create a Special Committee on FEC compliance for Democrats Abroad. This resolution was deemed controversial, hence why so much time was taken to discuss and vote on this particular resolution. The FATCA repeal resolution was on the agenda to be discussed and voted on after the FEC resolution.
With 1 hour remaining, a motion was made to extend the meeting by 2 hours, but the motion failed. The DPCA accomplished voting on and passing the FEC resolution. Given that time was not extended, the remaining resolutions and none of the Charter Amendments were voted on during the meeting this year.
It is a grave disappointment that the DPCA voting body did not have an opportunity to debate or vote on updating it's position on FATCA. Given the information that has come to light over recent months, it is clear that at the very least a discussion on FATCA is needed to review DA's current position of FATCA reform.
The TTF plans to submit the resolution at the next global meeting, which currently does not have a date set.
For those DA members that are disappointed that DA did not vote on the FATCA resolution last weekend you can email [email protected] and request that your email is forwarded to:
- Your Country Chair
- Your Country DPCA Representatives
- Your Regional Vice Chair
- The DA Global Executive Committee
Statement from the Democrats Abroad Taxation Task Force on the Congressional American Abroad Caucus Roundtable Discussion on May 23
Democrats Abroad is pleased to have spoken as experts at the first ever Congressional American Abroad Caucus Roundtable Discussion on May 23. Over 30 House Members and Congressional staff were in attendance.
The meeting was focused on discussing American abroad tax and financial access issues. Members present at the discussion include Americans Abroad Caucus Chairwoman Carolyn Maloney (NY-12), Co-Chair Dina Titus (NV-8), and Congressman Don Beyer (VA-8), who co-lead legislation to better serve Americans living abroad alongside of Caucus Co-Chair María Elvira Salazar (FL-27).
The meeting was closed to the public to ensure that Congressional leaders could speak openly about how best to resolve the tax and financial access problems and issues that Americans abroad.
Actions coming out of the meeting included:
- An emphasis on getting more co-signers on the 3 American Abroad Caucus bills which are:
- H.R.5799 - Overseas Americans Financial Access Act; Led by Rep. Maloney, Rep. Titus, Rep. Beyer, and Rep. Salazar
- H.R.5800 - Commission on Americans Living Abroad Act of 2021; Led by Rep. Maloney, Rep. Titus, Rep. Beyer, and Rep. Salazar
- H.R.6057 - Tax Simplification for Americans Abroad Act; Led by Rep. Beyer, Rep. Maloney, Rep. Titus, and Rep. Salazar
- These issues are bipartisan and impact every Congressional district in the nation. In order to generate wider support, more Republicans are encouraged to join the Congressional American Abroad Caucus.
- Democrats Abroad has invited Members in attendance to meet during the week of June 6th while DA leaders will be in Washington DC to carry on the conversation.
The meeting was a great success in that the Congressional American Abroad Caucus had never hosted a Roundtable Discussion, and it is the Taxation Task Force's hope that there will be more Congressional Roundtable discussions in the American Abroad Caucus in the future to provide a useful and productive forum for Congressional leaders to voice their concerns and generate productive actions to improve the lives for Americans abroad.