ACA in the News 2016
Tax Notes International (December 12, 2016)
Advocacy Group Offers Individual Residency-Based Tax Plan
"American Citizens Abroad is calling for a move away from citizenship-based taxation to residency based taxation for U.S. citizens and resident aliens, in a proposal put forth December 6 .
"The purpose of the six-page, side-by-side comparison between current law and provisions in the new proposal is to 'promote constructive consideration of the subject' and to outline the details of a change that has only been discussed broadly.
"'It is intended to lay out a middle-of-the-road version, which then can be examined and modified,' an accompanying press release states about its proposal to generally tax only U.S.-source income. 'It will provide a starting point for developing revenue estimates on the cost of switching from citizenship-based to residencybased taxation. It is, in other words, a form of baseline approach to the subject.'"
Expatbriefing.com (Decembre 8, 2016)
American Expats Lobbying For Residence-Based Taxation
"In a recent proposal, American Citizens Abroad (ACA) has set out a detailed description of its proposal for the enactment of residency-based taxation (RBT), rather than the existing citizenship-based taxation (CBT) system, for American expats.
"Under the current CBT, Americans abroad remain subject to US taxation as though they were still US residents. Under RBT, only US residents –whether Americans or foreigners – would be subject to US income, estate, and gift taxation, while Americans resident abroad would be taxed under essentially the same rules applicable to nonresident aliens.
"ACA therefore proposes that, as part of a general tax reform package, an election should be provided to citizens who are long-term nonresident citizens to be taxed as nonresident aliens if they meet certain conditions – for example, a minimum three-year period of residence abroad. ..."
Expat vote seen key in US election, but candidates avoid committing firmly to its causes
"...the non-profit, Washington, DC-based American Citizens Abroad advocacy group wrote to the two main party candidates as well as to the two leading independent candidates, asking for their positions on eight key issues 'affecting Americans living and working overseas', as it explained in a press statement.
"However, as ACA executive director Marylouise Serrato told International Investment last week, unlike in previous election years, the organisation didn’t receive responses from any of the candidates to its letters.
“'It is not clear why there was no response,' she added. 'You would need to ask the individuals we sent the requests to. We did try to follow up with phone calls, but nothing came of that either.'
"'The first hurdle was to identify the person within each of the candidates’ retinues who was responsible for handling these kinds of requests.'
"Summing up, Seratto said, 'We haven’t seen any official statement by either party or candidate that says "this is concretely what we’re going to do for the American community abroad if we get elected".'"
LearnVest.com (November 1, 2016)
Tempted to Move Abroad? 5 Things You Need to Know First
"...What if your job is with a U.S. company that is sponsoring and paying for your relocation abroad? Be sure to go through the terms of the contract with a fine-tooth comb before signing on the dotted line, says Jonathan Lachowitz, CFP®, founder of White Lighthouse Investment Management, which specializes in cross-border financial planning.
"Make sure there are certain provisions in your contract, such as a clause that brings you back home in case you lose your job while overseas, protections that guarantee repatriation expenses once your contract is over and an allocation for an independent tax advisor, since your taxes will get complicated. Also, says Lachowitz, don’t assume your employer’s human resources department or the relocation specialists they’ve hired will have all the answers you need.
"...The good news is the U.S. tax code does offer some provisions that can help reduce or eliminate the possibility of double taxation for expats. For instance, you may be eligible to claim foreign tax credits, or you may qualify for the foreign earned income exclusion, which allows expats to exclude paying taxes on a certain amount of their foreign income (for tax year 2015, for example, that amount was $100,800).
"Of course, it’ll help if you get advice from local tax and financial planning pros, 'because it can certainly be a shock to the system if you suddenly realize that your tax burden actually has been increased by taking on an overseas assignment,' says Marylouise Serrato, executive director of the expat advocacy group American Citizens Abroad."
SWI swissinfo.ch (October 20, 2016)
US ambassador asks Swiss banks to service Americans
"...US citizens living abroad are being denied banking services in a number of countries, not just Switzerland, according to ACA Executive Director Marylouise Serrato. Furthermore, US banks are also kicking out US clients who reside in other countries for fear of running afoul of regulations – both in the US and other countries.
"ACA is lobbying the US Treasury to ease the scope of FATCA. It believes that tax compliant Americans abroad, or the foreign banks that serve them in their country of residence, should not be obliged to report accounts under FATCA.
"'The focus of FATCA was to identify the offshore accounts of US citizens who live in the US,' Serrato told swissinfo.ch. 'We do not believe the legislation was intended to catch up with Americans legitimately living abroad and who need local accounts.'"
International Investment (September 26, 2016)
US political parties target expats, as prez campaign heads into final weeks
"... the American Citizens Abroad in August wrote to the presidential candidates in order to obtain their official stance on eight key issues of concern to expats. In addition to their stance with respect to the “same country exemption” amendment for FATCA, the candidates were asked what their positions were with respect to a proposal that the US federal tax regime be changed to a residence-based system, “like every one of the 50 states, and…virtually every other country in the world”, and how they feel about certain proposed changes to the so-called Foreign Bank Account Reporting requirements which, like FATCA, have caused considerable difficulty for many expats.
"An ACA spokesperson told International Investment that it has “not heard back from the candidates” with respect to its letter, but added that “we will be following up with their offices this week to try and get a response”.
"To see a copy of the ACA’s letter, click here."
International Investment website: http://www.internationalinvestment.net/other/us-political-parties-target-expats-prez-campaign-heads-final-weeks/
"Curbed" (September 20, 2016)
How to move abroad: Practical advice for anxious Americans
"It’s common for political partisans to say a particular electoral outcome may force them to make a dramatic move and head to another country. While nobody is advocating any post-election exit, if it’s a move you’re seriously considering, it’s worth doing right. After all, there’s a rich tradition of Americans living as expats, from the literary journeys of prominent authors to post-collegiate explorations of life on the other side of the globe.
"Curbed spoke to three experts with experience moving overseas—Marylouise Serrato, Executive Director of American Citizens Abroad; Alexandra Talty, a writer and world-traveler who has spent time in Beirut and the Dominican Republic; and Ben Tyrrell, head of MoveHub, an international moving service—to pick up tips and advice about relocating to another country. Here’s some timely advice on the exigencies of becoming an expat. (And, if you decide the election has left you no choice but to bail [out], make sure you register to vote the next time around)."
Libertas Repubblica di San Marino (September 17, 2016)
Cittadini americani all'estero: a Roma l'incontro tra San Marino e American Citizens Abroad
"Si sono svolti nella Capitale italiana nei giorni scorsi alcuni importanti incontri per trattare le problematiche afferenti ai cittadini americani residenti all’estero. In particolare, al suo arrivo da Washington D.C. la Dott.ssa Marylouise Serrato, Executive Director dell’Associazione American Citizens Abroad si è incontrata con i sammarinesi Dott. John Mazza e Rag. Palmiro Zanotti per prendere in esame la situazione dei doppi cittadini RSM-USA e per avviare una collaborazione che consenta, grazie all’intervento della Dott.ssa Serrato, di prendere contatti direttamente a Washington D.C. con le Autorità americane, in primis con i membri del Congresso degli Stati Uniti, per convincerli della necessità di avviare i negoziati con San Marino per la firma degli accordi bilaterali in materia di doppia imposizione e di Social Security."
USA Today (Sept. 6, 2016)
8 million Americans living abroad may tip a close election
"They could not vote until 1975, when the Overseas Citizens Voting Rights Act became law. Since then, non-partisan organizations, including Vote From Abroad and Overseas Vote Foundation, have offered help, such as how to register from abroad.
"Those living abroad have different priorities from voters who live in the U.S.'It’s inevitable that our varied perspectives are influenced by having lived under other countries' political systems,' said Dorothy van Schooneveld, a former lawyer who moved to France from Bloomington, Ind., in 1987.
"The top voter issues in the United States are economy and terrorism, according to a Pew Research Center survey in July. While those are important issues to expatriates as well, their top concerns are taxes and the requirement to report financial assets deposited in foreign banks, according to American Citizens Abroad, a worldwide advocacy group for expats."
Tax Notes International (Aug. 22, 2016)
Will the FATCA Same-Country Exception Become the Rule?
(Andrew Velarde, Tax Analysts)
"With final regs under the Foreign Account Tax Compliance Act pending, advocates of the same country exemption are anxiously waiting to see whether it will be in the guidance, but Treasury is not tipping its hand. ...
"According to Marylouise Serrato, executive director of the ACA, the group has had multiple meetings and communications with Treasury addressing the possibility of a same-country exception, and Treasury seemed receptive to the idea. Serrato did not go so far as to express any certainty in its adoption, however."
Full article (pdf posted by permission)
International Investment (August 16, 2016)
American expat group calls for ‘Same Country’ FATCA exemption
"Under the 'Same Country' exemption, as the ACA and a number of other US expat groups envision it, a US person who genuinely lives in a foreign country and has an ordinary bank account, that institution should be able to treat it as if they were not American, and that individual also would not be required to list the account when filing their IRS Form 8938, which is a 'Statement of Specified Foreign Financial Assets'.
"Instead, the individual would provide a 'mercifully short and to the point' form to their bank (or 'foreign financial institution' or FFI, in FATCA-speak) and the IRS, explaining the facts of this arrangement, the ACA told Stack in its letter.
"'There is no doubt that the "lockout" effect exists,' the ACA letter continues.
"'As we found in our investigation, a "Same Country" exemption would make a difference – changing banks’ behaviour towards Americans abroad – in that it addresses the key concerns of banks relating to FATCA.
"'Moreover, the "Same Country" exemption will benefit the administration of the voluntary compliance system. Americans abroad, in order to obtain the benefit of greater access to banking services, will want to timely file their US tax return, with the "Same Country" election attached…help[ing] the persistent problem of noncompliance.'"
Tax-News . com (August 15, 2016)
US Expats Urge 'Same Country' FATCA Exemption
"American Citizens Abroad (ACA) has advocated the inclusion of a 'Same Country Exemption' (SCE) in the final Foreign Account Tax Compliance Act (FATCA) regulations, soon to be issued by the US Treasury Department.
"In a letter to Robert B. Stack, Deputy Assistant Secretary for International Tax Affairs, ACA urged Treasury to exempt Americans residing in a foreign country from the rules requiring foreign financial institutions (FFIs) to report on US account holders' accounts.
"In its letter, ACA wrote that the provision in the final versions of the FATCA regulations 'could be surprisingly simple. The accompanying form to be provided to the FFI and the IRS by the individual "electing in" could be mercifully short and to the point.'
"There is no doubt, it added, that a 'lockout' effect exists against American customers from FFIs in foreign jurisdictions, but that a Same Country Exemption would make a difference in that it addresses the key concerns of FFIs relating to FATCA.
"ACA concluded: 'The Same Country Exemption will benefit the administration of the US voluntary compliance system. Americans abroad, in order to obtain the benefit of greater access to banking services, will want to timely file their US tax return, with the Same Country election attached. This will help with the persistent problem of noncompliance.'"
The Hindu (August 7, 2016)
U.S. tax hunt overseas causes global headaches
"A repeal of FATCA is unlikely as long as the U.S. retains its citizenship based taxation.
"However, a modification through a ‘same country exemption’ is more realistic and this is an area advocacy groups such as American Citizens Abroad (ACA), are working on. A same country exemption seeks a FATCA reporting exemption for everyday bank accounts used by expatriate Americans in their host countries.
"'ACA has been speaking extensively with Treasury’s Assistant Secretary for International Affairs and recently sent him documentation on his request for further information on Same Country Exemption,' Marylouise Serrato, Executive Director at ACA told The Hindu."
CNBC . com (June 25, 2016)
Moving abroad if Trump or Clinton wins? Not so fast
"The next time you hear people say they'll flee U.S. soil if so-and-so wins the presidential election, ask if they're familiar with the financial life of an expat...
"'There are a lot of issues that Americans overseas face, and it isn't easy,' said Marylouise Serrato, executive director of advocacy group American Citizens Abroad. 'We're trying to address some of [the complications] through regulatory change.'
"Specifically, Serrato's group is working to get changes made to the 2010 Foreign Account Tax Compliance Act.
"Commonly called FATCA, it requires foreign financial institutions — banks, insurance companies, stock brokerages, hedge funds, trusts, etc. — to file formal reports about accounts held by American citizens, whether they live in the United States or abroad. The penalty for noncompliance is a 30 percent withholding on any U.S. investments held by the institution..."
Wall Street Journal (June 10, 2016)
ACA-Members/SDFCU State-side banking product highlighted in the Wall Street Journal
Good News Tax Delinquents: The Government Isn’t Yet Taking Your Passport
"Do you owe back taxes to Uncle Sam? Your passport is safe—for now.
"Late last year, Congress enacted a law that would revoke passports of U.S. citizens who are “seriously delinquent” on tax payments to the Internal Revenue Service. The threshold is $50,000 or more, and it includes penalties and interest.
"Roughly six months after the provision took effect on Jan. 1, however, there are no reports of enforcement so far.
"The reason is likely because no regulations detailing it have come out. Currently, the IRS and State Department are working to write such regulations. People familiar with the matter don’t expect them until mid-November or even later.
"The passport provision is of special concern to Americans living abroad, because they often have to use their passports for routine activities of daily life, such as banking or registering a child for school. They also may not receive notices mailed by the IRS. ...
"...In addition, American Citizens Abroad, an advocacy group, recently concluded an agreement with State Department Federal Credit Union to offer its U.S. bank accounts, credit cards and other services to ACA members. (ACA dues are $70 a year, and the credit union isn’t a unit of the State Department.) ..."
Monthly News, BR Anchor Publishing (June 2016)
ACA's Roland Crim writes on how to vote easily while overseas.
"Ensuring a Seamless Overseas Voter Experience"
"So your move is planned, your future residence identified, the furniture movers are scheduled and you are ticking off the items on your checklist to ensure that your upcoming international move goes smoothly. But have you considered 'voting' as a checklist item?...Most importantly, remember that voting is more than compliance with an administrative calendar, It's a civic duty for everyone."
Tax-News.com (May 4, 2016)
ACA messaging on RBT cited again in a major tax media outlet.
"Residence-Based Taxation Put Forward For Americans Abroad"
"With regard to the increasing talk in the US Congress on tax reform, American Citizens Abroad (ACA) has provided the House of Representatives Ways and Means Committee with a full reform proposal for the enactment of residence-based taxation (RBT) for American expatriates.
"ACA has said lawmakers should enact RBT instead of the present citizenship-based taxation (CBT) system because it would reduce compliance burdens for expatriates, eliminate double taxation and costly double reporting, and improve competitiveness..."
USA Today (April 13, 2016)
"You think filing taxes is hard? Talk to Americans living abroad"
"...Tax relief is not on the horizon. The Geneva-based advocacy group American Citizens Abroad has pushed for years for taxation based on residence rather than citizenship. This way, the IRS would tax income generated only in the United States, such as from real estate and dividends on U.S. stocks, but no longer tax income from overseas. 'We're in constant contact with members of Congress and the Treasury to try to convince them that this is a good thing, but our argument gets lost in the shuffle,' said Anne Hornung-Soukup, the advocacy group's finance director."
International Investment (March 1, 2016)
"Amer Citz Abroad to help expats with banking needs"
"After years of lobbying US government officials over the problems that American expats have been having in being able to get bank accounts and mortgages while abroad, the American Citizens Abroad organisation is partnering with the State Department Federal Credit Union (SDFCU) to provide such expats with US-citizen-friendly banking services.
"The ACA said it had developed the ACA/SDFCU Account, as it is called, in cooperation with the SDFCU. It is designed to give ordinary American expats a full range of banking services without their needing to provide either a US address or be affiliated with a government agency."
Al Jazeera (January 29, 2016)
"The cost of not paying taxes in the US"
"Americans' passports could be seized if they owe more than $50,000 in taxes, but could this law be unfairly applied? ...
"Marylouise Serrato, an executive director of American Citizens Abroad, an advocacy group, said she was 'very concerned' about the new rules and is working with the IRS and State Department to ensure they are implemented fairly.
"'Whatever systems are put in place, they must certainly take into consideration how they affect Americans overseas and ensure those people are not negatively impacted,' Serrato told Al Jazeera.
"'It would be tragic for somebody who is trying to get out of a dangerous zone internationally and discovers that, for some reason, their passport is revoked or denied.'"
South China Morning Post (January 10, 2016)
"US expats fear loss of passports as tax regulations kick in"
"A new tax collection provision which took effect on January 1  has prompted concerns among United States citizens living and working abroad — including tens of thousands in Hong Kong — that they could lose their passports if they fall foul of the taxman.
"Charles M. Bruce, legal counsel for American Citizens Abroad, a non-profit organisation based in Washington DC, described the use of an individual’s passport as a 'lever' as too harsh for an American living overseas , adding: 'They will be afraid that their lives can be ruined.'
"He fears mistakes in the system which are not the fault of individual tax payers said could lead to 'terrible' consequences."