National Taxpayer Advocate (NTA) releases its “Annual Report to Congress” for 2019

National Taxpayer Advocate (NTA) releases its “Annual Report to Congress” for 2019.  The full report if available here: https://taxpayeradvocate.irs.gov/reports/2019-annual-report-to-congress/most-serious-problems

Among its legislative recommendations is a call for the harmonization of reporting requirements for taxpayers subject to both Foreign Account Tax Compliance Act (FATCA) and Foreign Bank Account Report (FBAR) filings.  As stated in the NTA report to Congress, 'Many U.S. taxpayers, particularly those living abroad, face increased compliance burdens and costs as a result of FATCA reporting obligations that significantly overlap with the FBAR filing requirements. The IRS has exercised its regulatory authority to eliminate duplicative reporting of assets on Form 8938 if an asset is reported or reflected on certain other timely filed international information returns (e.g., Forms 3520, 3520A, 5471, 8621, 8865, or 8891). It has also provided an exception from the reporting rules for financial accounts held in U.S. territories for bona fide residents of such territories.” See: https://taxpayeradvocate.irs.gov/Media/Default/Documents/2019-ARC/ARC19_PurpleBook_02_ImproveFiling_8.pdf.  Along with advocating for the simplification of filing of the two reporting regimes, the NTA advocates for “same country exception” for reporting of financial accounts held in the country in which a US taxpayer is a bona fide resident.  ACA advocates for this treatment which ACA originally proposed to Congress and the National Taxpayer Advocate in April of 2015: https://www.americansabroad.org/media/files/files/feffd7bf/same-country-exemption-2015-04-06.pdf. 

NTA also proposes providing additional time for taxpayers outside of the United States to request abatement of a math error assessment equal to the time extension allowed in responding to a notice of deficiency, https://taxpayeradvocate.irs.gov/Media/Default/Documents/2019-ARC/ARC19_PurpleBook_03_ImproveAssmtCollect_3.pdf.  NTA notes that “Taxpayers living abroad (temporarily or permanently) often require more time to respond to IRS notices than taxpayers living in the United States. Mail delivery takes longer in both directions —in some cases, depending on where the taxpayer is located, substantially longer. In addition, persons temporarily abroad often do not have access to their tax or financial records, making it difficult for them to respond immediately. “

ACA will be meeting with the National Taxpayer Advocate in 2020 to review current tax compliancy issues for Americans living and working overseas.