ACA Opposes Remittance Tax Proposal in the House Big Beautiful Bill Headed to the Senate

June 11, 2025 

Washington, D.C.

American Citizens Abroad (ACA) Opposes Remittance Tax Proposal in the House Big Beautiful Bill Headed to the Senate

American Citizens Abroad (ACA) has serious concerns with the remittance tax and accompanying compliance measures included in the House reconciliation bill. The Senate should remove the new remittance tax and compliance requirements altogether. It puts Americans abroad at risk of considerable financial harm, adding to the sizeable tax, filing and enforcement burdens they already bear. 

“Americans abroad will see the remittance tax as yet another punitive complication arising from what is, for them, an ordinary financial transaction.  They will liken the new paperwork burden to that attached to Foreign Bank Account Report (FBAR) reporting – a compliance obligation they face for holding even ordinary accounts in financial institutions in the countries where they live and work,” says ACA’s Legal Counsel Charles Bruce.

The analysis of the proposed remittance tax, prepared by American Citizens Abroad, raises many questions that still need to be answered, including: 

• The rules do not reference the Sender’s residence. It is unclear, therefore, if a transfer is exempted from the tax if the Sender is outside of the U.S. when the transfer is initiated. On the face of it, it appears that transfers requested by Senders not located in any State do not attract the excise tax, but it is not clear what “located” means.
• Exceptions for small transfers can be anticipated; how small remains to be seen.
• None of the rules reference the currency of the transaction, requiring it to be in U.S dollars.
• How the tax is applied to cryptocurrency and other forms of digital or virtual currency is an open, interesting question, which will be closely considered by many.

Should the remittance tax be passed into law, ACA foresees additional challenges for Americans living and working overseas such as reduced access to banking. Foreign (non-U.S.) banks approached by their American customers overseas asking the bank to facilitate a transfer from a related account in the U.S. to an account at that bank predictably will think here comes another load of compliance problems relating to U.S. tax enforcement.  Many will impose considerable transaction administration fees; others will refuse the service entirely.

“American Citizens Abroad (ACA) supports the goal of ending illegal immigration in the U.S. but is deeply concerned that a new tax levied on remittances would place a heavy burden of compliance on legal, taxpaying U.S. citizens. We appreciate that American citizens would be able to recoup a new remittance tax in the form of a tax credit, but U.S. citizens would be unfairly penalized by this new tax and would need to wait up to a year before they can access their own money, which the IRS would collect in the form of an interest-free loan. We hope that Congress will recognize the burden this new tax would place on American citizens in the U.S. and abroad,” added Marylouise Serrato, ACA Executive Director.

The Remittance tax provision is yet another example, like The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank Account Report (FBAR) that negatively impacts the ability of US citizens overseas to maintain financial and banking relationships.  

ACA has long advocated for policy improvements for Americans overseas including adopting Residence-Based Taxation (RBT) which is the global standard for taxation of individuals who are living and working outside of their country of citizenship.  The Senate has the opportunity to include RBT in its version of the "Big Beautiful Bill" currently under discussion in Congress. Congressman LaHood introduced this legislation, "Residence Based Taxation for Americans Abroad Act" (H.R.10468), in the last Congress.

ACA membership spans 102 countries including the United States. ACA is headquartered in Washington, D.C. and meets regularly with Congressional and Administrative offices.