ACA in the News 2017
Goldstein on Gelt Show (December 25, 2017)
Will Taxes Change for American Citizens Abroad?
US expat groups vow to continue fight to end citizenship-based tax regime, repeal FATCA
“tax reform – without RBT [a proposal to change the US to a residence-based rather than citizenship-based taxation model] – is not done until the House and Senate work out the differences in the two versions of the bill”.
Royal bride-to-be Meghan Markle’s US citizenship intrigues tax experts
"Charles Bruce, a Switzerland-based American tax lawyer with Bonnard Lawson-Lausanne who also represents the American Citizens Abroad as its legal counsel, says his advice to any American about to marry into a wealthy non-American family also would be to get the best advice possible as soon as possible – and then, to get an equally good second opinion."
US expat groups urge pressure on DC lawmakers as tax reform vote nears
"American Citizens Abroad sent its latest statement on the matter – about which it has been actively campaigning for months – to the Senate, formally informing its members that “a revenue-neutral, tight-against-abuse, harmful-to-no-one approach to residency based taxation” could be easily added to the tax reform legislation."
U.S. expats may be out of luck in tax reform
"One group representing U.S. expatriates, American Citizens Abroad, is pushing a bill that wouldn't reduce federal revenue by changing to RBT. The current citizen-based taxation only raises about $5 billion to $8 billion annually.”
Residency-based taxation: Americans living in Israel may soon see benefits
"For many years, the persistent call for change in the taxation of American corporations and individuals abroad has gone unanswered. However, the current US administration’s actions suggest the very real possibility of new tax rules, sooner rather than later. Indeed, assuming no major legislative disturbance or some catastrophe, such as a Russian-related scandal or open conflict with North Korea, some are predicting new tax rules before the end of this year. For American citizens living in Israel, this would mean relief from onerous compliance requirements and potential penalties that can lead to financial ruin."
Hopes for change to US citizenship-based regime still alive, campaigners say
"Marylouise Serrato, executive director of the American Citizens Abroad, said today that although residence-based taxation (RBT) isn’t currently mentioned in the bill that was approved yesterday, “there is still movement on RBT, and [still] time for its inclusion” in the final draft. The matter, for example, could also be brought up later on, including during debate on the Senate floor.
“ACA remains hopeful, and we are busy working offices in the Senate, Joint Committee on Taxation (JCT), etc., where we have interested parties,” she added."
Congress is considering giving Americans in Canada an incredible tax break
"The U.S. Congress has been mulling changes in the way American individuals abroad are taxed by shifting from a citizen-based income-tax system to a residence-based system that would only tax people on the income they earn in the U.S. Americans abroad would no longer be taxed on worldwide income simply because they are U.S. citizens; they would only have to pay tax to the country where they live.
This change would align U.S. rules with that of just about every other country in the world, except Eritrea."
Residence-based tax regime ‘would be revenue-neutral’ for US: research
"Today, Marylouise Serrato, executive director of the American Citizens Abroad, said that although the organisation and its advisers had “thought for some time” that a residence-based tax system need not cost the US Treasury anything in the way of lost revenues, “we are very pleased to have this confirmed”."
US expats’ fingers still crossed as first draft of tax reform bill doesn’t address overseas individuals
“The good news is that the game is [still] on,” the American Citizens Abroad said yesterday, after the House of Representatives unveiled the first draft of the long-awaited Republican tax reform bill –which said nothing one way or other about the taxation of individual Americans who don’t reside in the US.
US Passports Won't Be Seized For FBAR Violations: ACA
Americans and prospective US citizens will not lose their right to a US passport for incurring significant penalties for failing to declare a foreign bank account to the Internal Revenue Service, a taxpayer lobby group has said.
Group Nears Finish Line in Scoring Residency-Based Taxation
“The key to this is to have a really good baseline picture of what’s out there in the world and what the numbers are. There was not a good baseline for taxing Americans overseas. You cannot go waltzing into this unless you have [that] baseline,”
ACA: Tax Reform Should Tackle The Worldwide Tax System
"Often overlooked and misunderstood by the Congress, US citizens living and working overseas now appear to be poised to benefit from the Administration and Congress' desire for tax reform. There is a real possibility that new international tax rules will be passed in a greater tax reform overhaul and these rules will no doubt address tax policy for individuals as well as corporations."
Trump Tax Plan and You: WSJ Answers More of Your Questions
"...lawmakers are considering radical changes to how U.S. companies are taxed on foreign earnings, and changes may be afoot for individuals living overseas. Such changes often go hand in hand, according to Charles Bruce, a lawyer with American Citizens Abroad (ACA), an advocacy group.
Many overseas Americans have chafed under stepped-up enforcement of complex U.S. tax rules affecting them in recent years, and record numbers have renounced their U.S. citizenship.
ACA recently issued a side-by-side comparison of current law with the proposed changes, which it says would prevent abusive offshore accounts but ease compliance for those living abroad."
US political parties, other overseas groups ramp up resi-based tax campaign
“Taxing [expat Americans] based on citizenship dates from the Civil War, and was put in place for reasons no longer in keeping with the international world economy of today,” the ACA said in July, in comments submitted to a Senate Finance Committee on Reforming
Tax for Overseas Americans.
“RBT would translate into more jobs for Americans and more exports, given that it would allow small businesses to deploy employees overseas to sell US goods and services,” ACA executive director Marylouise Serrato added, in the ACA’s submission.
Potential tax changes for Americans in Panama
"For American individuals, residency-based taxation (“RBT”) treatment would provide a solution to these problems in the form of “territorial” treatment. This would mean that Americans abroad would only be taxed on U.S.-source income. Led by groups like American Citizens Abroad, which proposed RBT to Congress in 2016, efforts to make this change have steadily progressed. Since the 2016 elections, these efforts have “gone public,” with grassroots lobbying and “crowd-funding” of the costs of revenue estimates.”
Possible Changes on Taxation for U.S. Citizens in Mexico and Abroad
“Under RBT, an American residing anywhere outside the United States would not be subjected to U.S. tax on her worldwide income. She would be taxed on certain income from U.S. sources, such as, U.S.-source interest, dividends and gains from the sale of U.S. real state property,” said Bruce.
This transition from citizenship-based to residency-based taxation wouldn’t be difficult given the fact that tax rules for non-residents are already in place in the United States in the form of withholding taxes.
“This tax, if it applies, is imposed by means of the normal system of withholding tax, which is applied to non-U.S. [foreign] individuals and, with RBT, would be applied to nonresident U.S. citizens,” said Bruce.
Now it’s Swiss expats who are struggling to keep their homeland accounts
"For years, American and British expatriates have complained of the difficulties they’ve faced in trying to keep bank accounts back in their home countries. Indeed, the problem has been so severe in recent years for Americans that the American Citizens Abroad helped to arrange for the US State Department Federal Credit Union to create an offshore account designed specifically for American expats. (This special account, launched last year, enabled the ACA and the US State Department Credit Union team to win the Best International US Services Provider award at this publication’s 2016 International Fund and Product Awards event in October.)..."
Why more Americans are handing in their citizenship
"...In testimony submitted last month to Congress, the ACA noted that the only other country with a similar taxation rule was war-town Eritrea. 'An American citizen who … has resided outside the U.S. all her life, who owns no property in the U.S. and who earns no U.S. source income, is required to file returns and pay U.S. taxes the same as someone living in St. Louis,' the ACA said. 'The fact that she also pays tax to the country where she resides makes no difference.'"
Double taxation could be thing of the past
"As Congress works on “territoriality” for corporations, the door has been opened for enactment of a change for individuals from citizenship-based taxation to residency-based taxation. For individuals, residency-based taxation equates to “territorial” treatment. Led by groups such as American Citizens Abroad, efforts to make this change have steadily progressed. Since the 2016 elections, these efforts have “gone public”, with grassroots lobbying and “crowdfunding” of the costs of revenue estimates."
How a CU partnership is helping expats gain account access abroad
"...Mary Louise Serrato, Executive Director at ACA, told Credit Union Journal that ACA worked to find a solution to this problem and allow Americans overseas who did not have a U.S. residential address to continue to have access to U.S. financial products -- as many in the community still have a need for U.S.-based financial services. Hence, the partnership with SDFCU."
International Business Times (May 12, 2017)
Trump Tax Plan
"...FATCA is not a new tax but an additional reporting mandate for people with overseas assets; it closed loopholes left open by previous offshore account reporting rules and applies to the relatively well-off. ... Under agreements with foreign governments, banks in those countries must report those assets to the IRS as well, or face a 30 percent withholding penalty.
"Charles Bruce, who serves as legal counsel to American Citizens Abroad and specializes in tax compliance, said he’d worked with people who’d contacted him through the advocacy group after considering renouncing their U.S. citizenship to avoid the possibility of unknowingly breaking IRS or Treasury rules. One woman living in Scotland, for example, feared she would’ve had to pay an exhorbitant fee to see a specialist who could make sure she properly complied...'I believe banks want their business plan to be dealing with compliant customers,' he said. 'You can’t help people cheat on their home country taxes. That’s not a good business to be in. It’s exactly the kind of ugly business that can ruin your reputation.'
"American Citizens Abroad, along with Rep. Carolyn Maloney (D-NY), who testified at [a House subcommittee] hearing, have advocated for U.S. citizens living in foreign countries to be taxed by their countries of residence, a policy known as the same country exemption..."
Daily Tax Report (May 10, 2017)
No U.S. Private Debt Collectors for Americans Overseas: IRS
"Americans living overseas don’t have to worry that U.S.-based private debt collectors will be trying to find them under an IRS program, the agency told Bloomberg BNA late May 10.
"'The companies participating in the private debt collection program are only licensed to operate in U.S. states and territories,' the Internal Revenue Service said in a statement. 'As a result, the IRS is excluding taxpayers who live outside the U.S. from the private debt collection effort.'
"The news brought immediate praise from American Citizens Abroad. The group had asked for an exemption from the program in a May 5  letter to IRS Commissioner John Koskinen. The letter cited concerns that American taxpayers living overseas don’t have adequate information about how the program—created in 2015 under the Fixing America’s Surface Transportation Act (Pub. L. No. 114-94)—would work.
"Marylouise Serrato, executive director of American Citizens Abroad, called the IRS’s decision 'fantastic news' in an interview late May 10.
"Even for U.S. citizens who didn’t know about the program, 'it takes away one more complication for them. I think most Americans would be relieved' that they won’t be confronted by private debt collectors, Serrato said."
Tax Notes International (April 3, 2017)
Group Pursuing Score of Residency Taxation to Prove Neutrality
"...'It’s got to be two things. It’s got to be revenue neutral and it has to be tight on abuse,' Charles M. Bruce of Bonnard Lawson and legal counsel for the group said about the group’s [ACA] middle-of-the road approach. 'It is absolutely the case for a significant number of these people that [what motivates them] is saving with reporting and not being worried about the system, which is scary to them. And a lot of them are not being driven by the taxes,' he said."
The Hill (April 5, 2017)
Americans abroad lobby for tax changes
"...Marylouise Serrato, executive director of the nonpartisan group American Citizens Abroad, said that 'it’s very difficult to comply with the tax code once you’re overseas' and that residency-based taxation would fit nicely with GOP proposals to move to a 'territorial' tax system where corporations’ foreign earnings aren’t subjected to U.S. tax..."
The Hill (March 21, 2017)
Group raising funds to promote tax changes for Americans living abroad
"The American Citizens Abroad Global Foundation is raising money so that it can commission professional revenue estimates that it can use to show Congress that tax changes to help U.S. citizens living abroad would not add to the deficit.
"ACA Executive Director Marylouise Serrato said that her group's meetings with lawmakers' offices lead her to believe that that legislation that moves to residency-based taxation 'is eminently doable.'"
U.S. Treasury Passes on Same-Country Exemption. Too Bad.
ACA Legal Counsel opinion piece on the US Treasury passing on Same-Country exemption for FATCA published in Tax Analyst.
Expats Find a Home for Their Money at State Department Credit Union
"...The SDFCU has experience working with expats; for years, it has offered accounts to Americans who work at embassies and other locations abroad. Under an agreement reached with ACA last year, any member of the association is eligible to open an SDFCU account (membership in ACA costs $70 a year, $55 for seniors). You don’t need a U.S. address to open an account, and you don’t have to be a federal employee..."
USA Today (Feb. 9, 2017)
More and more Americans are renouncing their U.S. citizenship — here's why
"...Marylouise Serrato, executive director of the advocacy group American Citizens Abroad, said her group has heard from people who were shunned by foreign banks because of the added burden of compliance.
"'Many are doing it because, simply, their lives and livelihoods are overseas and they can't function any more. What do you do when you can no longer bank your paycheck?' Serrato said. 'This narrative that Americans don't want to pay their taxes, that's not a fair representation of the situation.'..."
International Investment (Feb 8, 2017)
UK’s Boris Johnson among most recent batch of US citizenship renouncers
"...Some American expats and others, such as the American Citizens Abroad, believe that many of the problems Americans overseas are facing could be solved if there were an exception to the law made for institutions in which the expat in question was living, which the ACA calls 'the Same Country Exemption'. Others say that if the US were to join the entire rest of the world in taxing on the basis of residency rather than citizenship, many of the worst problems expat Americans suffer could also be avoided..."