Tax Simplification for Americans Abroad Act introduced by Congressman Beyer
On November 19th, Congressman Beyer introduced the Tax Simplification for Americans Abroad Act (H.R.6057). The bill provides for a simplified tax filing form for certain Americans living and working overseas and also expands the definition of foreign earned income eligible for exclusion under the Foreign Earned Income Exclusion (FEIE, section 911 of the Internal Revenue Code). New categories of income would be eligible for exclusion such as; pension income, disability payments, etc. As a service to the community, ACA has written a brief explanation of the elements of the bill, however, an official technical explanation may be provided by the Congressional tax writing committees and, when made available, ACA will share with the community along with our commentary. Also, there is no estimation of revenue effects as of this date.
Congressman Beyer’s bill is a good step forward and indicates that Congress is getting the message that something needs to be done about the taxation of Americans overseas. ACA has been instrumental in getting this message into Congress through our advocacy in Washington, DC and our write-in campaigns calling for the Congress to hold hearings. Hearings are exactly what is needed and are the essential next step in the process of tax reform for Americans overseas. Although the Tax Simplification for Americans Abroad Act addresses some of the cost and compliance issues that have been reported by overseas Americans, it does not address the greater problems associated with the current Citizenship-Based Taxation (CBT) regime which can only be addressed by serious tax reform and adoption of Residence-Based Taxation (RBT).
A key component for hearings is the presentation of good data and information on the community of Americans living and working overseas. An accurate count of the number of Americans living overseas, data on the revenue generated by CBT and data on the asset and income make-up of Americans overseas, are essential. American Citizens Abroad Global Foundation‘s (ACAGF) 2017 research by our contractor District Economics Group (DEG) to provide revenue estimates for ACA’s side-by-side comparative of CBT and RBT has already provided offices in Congress with some of this vital information. ACAGF’s follow-up research project with DEG to update our 2017 report will be issued shortly and ACA will be returning to offices on Capitol Hill that are involved in the writing of tax legislation and in the scoring (evaluating the cost) of legislation, such as, Congressman Beyer’s bill, to present our research and data. Surprisingly, the government does not have complete data on the community of overseas Americans, and ACAGF’s research project has provided them with a more complete and accurate picture.
ACA applauds Congressman Beyer’s efforts to address the tax and compliance issues of Americans overseas and supports his efforts to bring attention to the concerns of Americans abroad. At the same time, ACA stands firmly behind adoption of Residence-Based Taxation (RBT). RBT is the only way to address all the tax and compliance issues of Americans Abroad. ACAGF’s research work has demonstrated that RBT can be adopted, can be revenue neutral (not cost the government) and super tight against abuse.