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June 9, 2021

ACA writes to the US Treasury asking for a de minimis ruling for GILTI and Transition Tax highlighting the importance of RBT as the ultimate corrective measure for overseas taxpayers.

American Citizens Abroad (ACA) again stresses that the US Treasury apply a de minimis ruling, threshold for reporting, for small businesses owned by Americans living and working overseas.  Many small businesses, coffee shops, yoga studios, independent consultants, were caught up in the GILTI and Transition Tax regimes that were meant for large US multinationals that were offshoring profits.  Small US owned businesses overseas should be removed from the GILTI and Transition Tax reporting regime by applying a threshold.  ACA writes again to the US Treasury advocating for a de minimis ruling.  ACA's letter also points out that the 5 hour time estimate for reporting this information under the current TCJA regulations is in accurate and that the burden on overseas filers is much higher.

ACA concludes by reinforcing the message that Residence-Based Taxation (RBT) is the ultimate corrective measure for American taxpayers living and working overseas.  Letters such as these are important in supporting ACA’s advocacy for RBT as although we provide suggested regulatory solutions to problems, we are highlighting the over-riding issue that Citizenship-Based Taxation (CBT) is unworkable in a modern, global economy and that RBT is the right way forward for taxpayers and the US government.