National Taxpayer Advocate issues systematic advocacy objectives for 2024
The IRS recently released the “National Taxpayer Advocate Objectives Report to Congress, Fiscal Year 2024” (Report). The Report included several excellent advocacy objectives relating to citizens residing abroad. This brief post highlights the most relevant to our community of citizens residing abroad. The numbering in this post corresponds to the numbering in the Report.
5. Reduce Burden on Taxpayers Applying for an Individual Taxpayer Identification Number. Some citizens residing abroad may have non-U.S. citizen spouses involved in U.S. based investments requiring the non-U.S. citizen spouse to obtain an Individual Taxpayer Identification Number (ITIN). The Report’s attention to international taxpayers impacted by the IRS’ outdated system for assigning ITINs is encouraging.
7. Eliminate Systemic Assessments and Offer a First Time Abatement Waiver for International Information Return Penalties. Many citizens residing abroad find compliance with FATCA reporting and the IRS’ demanding regime requiring reporting non-U.S. trusts, corporations, partnerships, disregarded entities, and more overly complex and difficult to navigate. At times tax advisors have failed to identify required international information returns, and later citizens residing abroad learn of the reporting requirements and file international information returns late although with reasonable cause. The Report points out stark statistics concerning the IRS’ harmful and anti-taxpayer policies of systemic penalty assessments. We applaud the National Taxpayer Advocate’s proposals to end systemic penalty assessments for international information returns and implement first time abatement for penalties for international information returns.
17. Reduce Compliance Barriers for Overseas Taxpayers. We applaud the Report’s candor concerning the “numerous and significant challenges complying with their U.S. tax obligations” for taxpayers residing outside of the United States. Among other activities, the Report states the National Taxpayer Advocate will “[m]eet with representatives and stakeholders for international taxpayers to better understand the challenges they face in complying with their U.S. tax obligations and make administrative recommendations to reduce such compliance burdens.”
We wholeheartedly look forward to a dialogue with the National Taxpayer Advocate and her excellent staff to champion the real world issues tax compliance issues faced by citizens residing abroad.