April 15 may be Tax Day in the US, but for those abroad, the big deadline is June 15.
This is the perfect time to remind Congress that the 2017 “tax reform” once again completely ignores Americans abroad, and worse still, subjects thousands if not millions of us to yet another punitive provision in the form of transition taxes.
What tax solution would support Americans abroad? Residency Based Taxation, and exemption from tax policies that unfairly group everyday Americans abroad with the super-rich in the US who use offshore accounts to hide from the law.
This week’s Tiny Action: Tell your Senators and Representatives to provide a fair remedy for Americans abroad this International Tax Day.
The script below asks your Members of Congress to support:
- The Residency Based Taxation proposal in development in the Ways & Means Committee
- The Overseas Financial Access Act HR 2136, so that we do not have to report our foreign financial accounts under FATCA
- an exemption from the “transition taxes” in the 2017 tax law to prevent the destruction of many thousand of businesses owned by Americans living abroad
- a remedy for accidental Americans and Social Security recipients
Hi, my name is [NAME] and I'm a constituent who votes in [DISTRICT/STATE] but I’m calling from [LOCATION], where I currently live. I’d like to ask the [Senator/Congress(wo)man] to support a tax remedy for the millions of Americans abroad who are unfairly treated under our current tax code.
Like all Americans abroad I am required to file taxes both in the US and in [COUNTRY]. There are 6.5 million people like me, living outside the United States, struggling with the current tax code because it discriminates against us in so many ways.
We were – and continue to be – forgotten in this system. For example, the “transition taxes” in the 2017 Tax Act will devastate countless American business owners abroad, forcing them to close their companies. Despite the 12 month reprieve from filing, these new taxes will have devastating results.
It would take Congress years to address ALL of the tax code provisions that harm Americans abroad. That is why Americans abroad want the US to move from our current system of citizenship based taxation to residency based taxation. If the US had a system of residency based taxation, like nearly every other nation, I’d still be required to report my US-based income to the IRS, but not the income I make in and already pay tax on to [COUNTRY].
Congressman George Holding is working on a Residency Based Taxation proposal. I ask [NAME] to work with Congressman Holding’s office on the development of a bill to enact Residency Based Taxation.
I am also asking for [his/her] support for HR 2136 the Overseas Americans Financial Access Act, which would exempt Americans living abroad from disclosures on the financial accounts where they live – accounts they need to pay bills and save for the future.
There are two final things I’d ask for - that the [Senator/Congress(wo)man] also support HR 1205, the “Social Security Fairness Act” which will allow Americans abroad with pensions where they currently live to claim the full amount of Social Security payments owed to them; and a fix for accidental Americans. Those, for example, born to non-American parents who were temporarily residing in the US at the time of their birth. Since they’re technically American, they’re also expected to file along with the rest of us. Of course, renouncing their citizenship is possible, but it’s an incredibly lengthy and expensive procedure.
It’s really terrible to hear stories of Americans who have had to renounce their citizenship because of the tax code. That’s not what we want. But these people - who are American only on a technicality - should be able to shed this unfair burden.
Thanks very much for your time.
- Learn about this action in more detail, from our Taxation Task Force
- Support Round 2 of our campaign specifically addressing Transition Taxes. The IRS recently announced a 12 month extension, but this is simply not enough.
- Review our recent submission to the House Ways & Means Committee about this issue
- Learn about RBT and why we support it
- Find answers to your FATCA questions here
- Read our request for clarification on the use of Social Security numbers provided on passport applications
- Have a look at this quick but important update, resolving to seek formal support for RBT from the Democratic Party
- HR 1205
- HR 2136
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As always, our aim is to turn tiny actions into big results, so we hope we can continue to count on your help! Please send suggestions for our next tiny action to info at democratsabroad dot org.