The big question on everyone's mind ... what's happening with the residency-based taxation (RBT) legislation?

As we reported back in the third quarter of 2025, there is bicameral support for RBT. Senator Todd Young (R-IL) is working closely with Congressman Darin LaHood (R-IL) to introduce legislation that move the U.S. to a residency-based taxation (RBT) system. This legislation would be an update to the December 2024, Residence-Based Taxation for Americans Abroad Act (H.R.10468). It is because of the work of organizations like ACA that we are seeing bicameral support for this issue. We have been advocating 24/7 to Congress, using all the tools in our toolbox to build awareness for the legislation and bring on supporters in both the House and the Senate.

Other legislative efforts have also helped raise awareness for the need to move to RBT. Over the summer, Congressman Jeff Hurd (R-CO) introduced the Holy Sovereignty Protection Act (H.R. 4501), which would exempt Pope Leo XIV, the first American pope, from U.S. taxation on his foreign income. ACA has been active in the media highlighting that, “what is good enough for one American overseas should be good enough for all Americans overseas". New VISA proposals are also hinting to the problem of double taxation as the Platinum Card VISA proposal includes an exclusion on taxation of foreign income for those investing in this VISA. Again, ACA maintains what is good enough for those investing in the U.S. should be good enough for its citizens living abroad!

All this points to the fact that Congress is waking up to the problem, looking for solutions, and acknowledging that continuing to tax U.S. citizens based on a law that was intended to address concerns during the Civil War needs to be updated for the modern era!

Why haven't we seen new legislation introduced into Congress? What's taking so long?

In order to capture the concerns of U.S. citizens living and working abroad, our allies in Congress are being thorough – taking input over the past several months from individuals and organizations, including ACA, on the original 2024 bill text. Congressman LaHood wants to learn from the community and organizations to ensure the legislation captures, as best it can, the concerns of those living and working overseas. The 2024 bill closely follows ACA's original modeling for RBT, however there are areas where we have suggested structural improvements to the legislative language. This step has taken time, but is necessary for the legislative process and gives the bill a leg up going into the scoring process.

There have been many meetings between Congressman LaHood and Senator Young’s staffs, the Joint Committee on Tax (JCT), and Legislative Counsel to review the changes and evaluate the numbers. This is no small task. Everyone wants to get the legislation "right" so that it so ready should a legislative vehicle become available to move it through Congress.

ACA is in regular contact with Congressional offices on matters affecting U.S. citizens overseas, especially taxation, making sure that. RBT is on a path for success. Our briefings on Capitol Hill provide critical context for members of Congress who will ultimately review the RBT bill and consider co-sponsoring. ACA provides background on U.S. citizens overseas, answers Member's questions about U.S. taxation and its impact, and gives Members the technical information they need to support RBT.

Why is ACA Global Foundation's (ACAGF) research on the community of U.S. citizens overseas important to RBT legislation?

To support Congressman LaHood and Senator Young and provide Congressional offices and the Administration with the research and data they need, ACAGF has recently conducted two important research studies. The first is a study on the community and its support for RBT. This data gives Congressman LaHood and Senator Young information they need to sell RBT to their colleagues and in securing support from the Administration. Remember, President Trump promised an end to double taxation for U.S. citizens overseas.

ACAGF has also commissioned a national accounting firm to prepare a report on the revenue effects RBT legislation, building on the research work fielded by ACAGF in 2017 and again in 2022. In 2017 and 2022, ACAGF provided offices with a revenue estimate for ACA's modeling of RBT, as well as valuable information on the community, its size, and financial composition. You can't begin to develop a score (revenue estimate) for RBT unless you have a solid understanding on how big the community is and what it looks like – ACAGF's data adds to government data on these points, adding additional context and filling in any gaps.

ACAGF is committed to giving Congress and the tax writing committees all the information, data, and research they need. While government data, especially JCT data, is the most trusted source, professional staffs and Members welcome independent research. This was the case in both 2017 and 2022 when we presented our work to Members, JCT and Legislative Counsel and Treasury. Even when RBT legislation is introduced this year and is scored for a revenue estimate, congressional offices will have questions about the cost and elements of the legislation. ACAGF's updated research study will be helpful in answering these concerns.

ACAGF is the only organization that has invested in professional research work, provided a fiscal profile of the community, and independently scored the cost of potential RBT legislation. Typically, revenue effects released at the time of introduction are general ballpark figures. Due to our own modeling and work on three studies, ACA is in a position to analyze the several dozen provisions which together comprise the RBT bill. With this "granular" information in hand, ACA can give detailed comments to Members and staff, and provide valuable guidance to all interested parties. This will be vital in our ability to gain co-sponsors.

When can we expect to see a new version of the bill?

ACA wishes it had a crystal ball. Congress is hard to predict and, although JCT and the bill sponsors are in active conversations, JCT has more on its plate than just RBT. This doesn't mean that RBT isn't an important issue for JCT, it just means they also have asks coming in from all 435 members of the House, 100 senators, and two tax writing committees. Luckily, ACA is helping move the ball forward by keeping the pressure on through our advocacy! ACA anticipates that Congressman LaHood and Senator Young's legislation will be introduced in the first quarter of 2026. However, more important than the timing of introduction is ensuring that the legislative language addresses the concerns of the majority of the community, that the legislation has an acceptable cost (score), and that the legislation is well crafted. It is worth the wait for these elements so that when introduced the legislation has the best chance possible for passage.

What else is ACA doing to help support RBT?

ACA management continues to publish op-eds in both large and small regional media outlets in order to keep focus on RBT. Many of these outlets are targeted for cities and districts where we know there is congressional support for RBT. ACA is regularly quoted in Tax Notes, Politico, and other major media outlets. Recently, ACA was highlighted on local television in Miami, FL.

ACA continues to work with other tax advocacy organizations, most notably Americans for Tax Reform (ATR), to push for and amplify the call for RBT. ACA continues to build on these relationships, growing the number of voices calling for tax reform for U.S. citizens overseas. Having high-profile like-minded advocates on an issue this important to the community helps strengthen our voice with Congress and the Administration.

ACA is also engaging the community. ACA and ACAGF are hosting regular webinars to inform the community and Chapter meetings to help get the word out. ACA encourages members to use our advocacy write-in campaigns to reach your Representatives' offices in Congress. Only ACA has this has this write-in advocacy tool. Your message gets directly into your Representative's office and ACA can follow up with a meeting to reinforce your voice and the need for RBT.

ACAGF is building out its research branch. Realizing how important data and information on the community is to congressional offices and the Administration, ACAGF is augmenting our research capabilities. This is key not only for legislation like RBT but for other issues like overseas voting, representation, and future legislation and regulations that come into effect. Increasingly, ACAGF is being recognized as the "think tank" for Americans overseas and for people who advise and otherwise service them. Its position is necessary for issues like RBT and, we believe one day soon, the adoption of RBT-friendly strategies for individuals and service providers of all stripes.

ACT TODAY!

Join our advocacy campaigns for RBT. It's as easy as three clicks with your mouse, or on your phone, to share your message directly with your Representatives' offices. ACA will follow up with these offices to reinforce the message that RBT is needed now.

Donate to ACA, Inc. and help our lobbying efforts in Washington, D.C. ACA is a registered lobbyist and our professional, Washington, D.C. staff is meeting regularly with members of Congress and the Administration. ACA has also engaged BGR, a Washington, D.C. lobbying firm, to help us get through some of the tougher doors in Congress. But all this needs funding.

Donate to ACAGF. Research will be essential as we’ve previously noted. Help us continue to fund research projects, not only for taxation issues, but other issues affecting the community of U.S. citizens overseas. 

Donate to the ACA-PAC. ACA members can donate to the ACA-PAC. ACA is already seeing benefits from these donations giving us more access to members of Congress in D.C. Remember ACA is non-partisan and supports policy that is good for the community!