American Citizens Abroad (ACA) publishes a detailed description of its Residency-Based Taxation (RBT) proposal and announces a coalition to score the RBT proposal

On December 5, 2016, American Citizens Abroad (ACA) published a detailed description of its Residency-Based Taxation (RBT) proposal and announced a coalition to score the RBT proposal.

ACA believes that the upcoming Congress will consider amending the Internal Revenue Code to change from a citizenship-based approach to taxing individuals to a residency-based approach. The United States is the only industrialized country that taxes using a citizenship-based regime; that is, an American citizen is taxable on his or her worldwide income regardless of the fact that that individual resides entirely outside the US.  While this change has been discussed for a long time, what exactly it might entail in the way of changes to the existing tax code has not been spelled out.

In order to promote a constructive consideration of the subject, ACA has advanced its advocacy efforts by developing a side-by-side comparative chart* indicating the current tax code (CBT) compared with details on ACA's RBT proposal. It is intended to lay out a middle-of-the-road version, which then can be examined and modified.  It will provide a starting point for developing revenue estimates on the cost of switching from citizenship-based to residency-based taxation. It is, in other words, a form of base-line approach to the subject.  ACA is  consulting with Congress and organizations involved in tax reform, as well as with members and supporters, and welcomes their input, suggestions and commentary.

ACA, with others, is creating a coalition of organizations interested in the subject of RBT to support the work of developing these revenue estimates and expects to complete this in the coming months.   ACA and its sister organization, American Citizens Abroad Global Foundation, have begun raising monies to fund the scoring project.  ACA has already spoken to organizations working on this issue and invites others to join in this important effort.

For additional information or if you have questions or comments, please contact Marylouise Serrato at [email protected] or +1 202 322 8441.

*The principal draftsperson of the comparative chart is Charles M. Bruce, Legal Counsel American Citizens Abroad, Inc.  He is also Counsel at Bonnard Lawson-Lausanne.  He is solely responsible for any errors.  Thanks go to all members of ACA Executive Committee and retired Director Jackie Bugnion.