Press and Media

Washington, DC

August 24, 2022

American Citizens Abroad (ACA) publishes new webinar to explain updated research report in support of residence-based taxation

In April of 2022, ACA Global Foundation announced the findings of its second research study in support of residence-based taxation (RBT).

This updated and expanded research follows on a 2017 research study, which ACA Global Foundation (ACAGF) fielded with District Economics Group (DEG). The webinar “Digging Deeper: Analyzing Revenue Effects of RBT” takes a deep-dive into the updated data and explains the methodology used in developing, among other things, the size of the population of US citizens overseas, their investment and income profile and their tax compliancy.

Michael Udell, Founder and Managing Director of DEG, along with ACA management, Marylouise Serrato, Executive Director ACA, and Charles Bruce, ACA Legal Counsel and Chairman of ACAGF, walk through the updated data sources and provide viewers with information on how RBT legislation can be made revenue neutral, i.e., not lose revenue over a 10-year budget period. Revenue neutrality is widely recognized as a vital element for passage of any RBT-style legislation.

“ACA and ACAGF believe, based on our meetings with the Congress and Administration, that movement is afoot to consider enactment of some type of Residence-based Taxation (RBT) in lieu of Citizenship-based Taxation (CBT). CBT taxes US citizens on their worldwide income no matter what – regardless of where they reside, where they work or where their income originates. Under RBT, individuals who truly reside in a foreign country would not be taxed by the U.S. on their foreign sourced income, only on their U.S. sourced income,” said Marylouise Serrato.

“The key to RBT is the numbers. They are like the buttons on a pinball machine; if you don’t know the scores attached to the buttons, you don’t know what you’re doing. ACA is providing Congressional offices with the data they need to press the right buttons to make RBT a reality,” added Charles Bruce.

“ACA and ACAGF is working to get the word out on the new data and this webinar gives us an opportunity to get the information out to a wide audience. ACA recommends individuals share it with their professional and personal networks so the community can understand how important and vital this research is,” said Jonathan Lachowitz, Chairman, ACA.

Be sure to watch and listen so you can see why ACA and ACAGF believe that their advocacy supporting RBT legislation, that is revenue neutral, is the right strategy. Our DC team and our contractor DEG bring a wealth of tax legislation knowledge and expertise to this issue. Learn why this work is so important to the community and don’t forget to donate to our efforts.

Charles Bruce is an international tax attorney in Washington, DC and London. He was formerly Counsel to the U.S. Senate Finance Committee.

Michael Udell, before founding DEG, worked at the IRS estimating the tax gap using the Taxpayer Compliance Measurement Program data and continued at the Congressional Joint Committee on Taxation (JCT), providing revenue estimates of federal tax legislation. He is a former senior manager at Ernst & Young LLP. He earned a BA from the University of Pennsylvania and a PhD from Caltech.

Washington, DC

April 13, 2021

American Citizens Abroad Global Foundation (ACAGF) announces fundraising campaign to raise $75,000 to support research work for Residence-Based Taxation.

American Citizens Abroad Global Foundation (ACAGF) today announced a major fundraising campaign in support of research that will be key in helping with the passage of Residence-Based Taxation (RBT).   

ACAGF is a section 501(c)(3) charitable organization. It is the sister organization of American Citizens Abroad, Inc. (ACA), a section 501(c)(4) exempt organization advocating for Americans overseas.

ACA has been calling on Congress and the Administration to adopt Residence-Based Taxation for US citizens who live and work overseas. “The current system of taxing US citizens based on their nationality is inconsistent with global norms, costly to administer and puts US citizens working overseas at a disadvantage, and importantly it adds to the cost of US exporters wanting to hire Americans to help sell their products and services,” said Marylouise Serrato, ACA Executive Director.

ACAGF’s research project will add to the existing body of work that ACAGF fielded in 2017 with District Economics Group (DEG), a non-partisan economic consulting firm providing specialized economic analysis and insights into federal and state budget, legislative, and regulatory policymaking processes. “Congress and the Administration will not move on tax reform for US citizens overseas unless it can understand and analyze the baseline and other data on the community. ACA produced an analysis in 2017 that provided the Congress and Administration with this information, it was very well received and now offices want updated and more detailed data,” said Charles Bruce, Chairman of ACAGF.

ACA and ACAGF are confident that hearings on amending international tax rules will take place in this Congress and that the issues of overseas taxpayers will be addressed at these hearings. ACA and ACAGF’s data, research and work is already in the hands of the important offices involved in tax reform; the House Ways & Means Committee, Senate Finance Committee and the Joint Committee on Taxation, now it needs to be put on the official record through hearings. ACAGF notes that organizations like itself are well respected and are being looked to as a “go to source” for input.

“We know from a series of Freedom of Information requests and from published IRS data, that there is an incomplete picture of the overseas taxpayer. Our current data provides a more complete picture, which shows that RBT can be adopted without a loss of revenue. ACAGF’s new research project will build on existing data and further support our position that RBT is eminently do-able,” said ACA’s Chairman, Jonathan Lachowitz, adding “anyone who wants to see Residence-Based Taxation passed into legislation should immediately go to the ACAGF website and click donate.” 

The deadline for donations is July 1, 2021 and ACAGF has already raised over $25,000 towards its goal of $75,000.  Click here more details.

Contact:

Marylouise.serrato@americansabroad.org

+1 202 322 8441

Washington, DC

March 10, 2020

Glen Frost appointed President of Americans Citizens Abroad Global Foundation (ACAGF)

American Citizens Abroad Global Foundation (ACAGF), the sister educational and research organization to American Citizens Abroad (ACA) announced today that Glen Frost has been appointed to serve as President of American Citizens Abroad Global Foundation. Glen will also continue to serve as Associate Legal Counsel for both organizations. In these roles, he strives to promote the well-being of U.S. citizens abroad. Glen accomplishes this by working with the foundation to (1) identify critical issues and activities that impact Americans abroad; (2) analyze and develop information about these subjects; and (3) ensure that such information is provided to all affected parties—both individuals and governments—and widely disseminated otherwise. Glen is also the managing partner for Frost & Associates, LLC. He focuses his national and international practices on tax controversy and tax planning matters, business law matters, and estate planning matters and has been awarded Martindale-Hubbell’s AV Preeminent® Lawyer Rating. Glen earned his JD and LL.M. in Taxation from University of Baltimore School of Law. He is also a licensed Certified Public Accountant and Certified Financial Planner™.

ACAGF has been instrumental in its support of ACA, Inc.’s advocacy efforts for tax reform primarily through its research work, the development of revenue estimation and data sets for ACA’s Residency-based taxation approach to reforming the tax code for Americans overseas and in its hosting of webcasts to help educate the community on Congressman Holding’s “Tax Fairness for Americans Abroad Act” (TFAA) which was introduced in the 2018 Congress.

“We are very pleased that Glen will be serving as President of ACAGF. Glen brings with him the talent and knowledge needed to help drive our important research and educational work on behalf of Americans living and working overseas” said ACAGF Chairman, Charles Bruce.

To learn more about ACA, Inc and ACAGF please visit our websites: https://www.americansabroad.org and https://www.acaglobalfoundation.org 

Washington, DC

March 25, 2019

On March 13^th and 14^th, American Citizens Abroad (ACA) and American Citizens Abroad Global Foundation (ACAGF) hosted two webcasts updating the community on the recently introduced legislation, Tax Fairness for Americans Abroad Act (TFAA).

Introduced on December 20, 2018 by Representative Holding (R-NC), TFAA (H.R. 7358) would change the approach to taxing US citizens living and working overseas to a residency-based taxation—some call it territorial-- approach.  Americans overseas would no longer be taxed on income that is not earned in the United States.  This would bring the US in line with the global norm for taxation and would alleviate problems of double taxation and compliancy costs for millions of Americans overseas.

Invited to speak at the webcasts were Matt Stross, Tax Counsel for Representative Holding, ACA Legal Counsel Charles Bruce and, several tax professionals (March 13 bios) (March 14 bios). 

“ACA and ACAGF felt it important to have an update on the extensive work that Representative Holding’s office has been doing on this legislation and inform the community on next steps,” said Charles Bruce, ACA Legal Counsel and ACAGF Chairman.

The proposed legislation would work off the Foreign Earned Income Exclusion (FEIE) and would create an exclusion for income earned outside of the United States by qualified non-resident US citizens. Stross highlighted that staff is working with the Joint Committee on Taxation (JCT) and the House Office of the Legislative Counsel to better define “some of the trickier issues” such as how to define personal property and how to tax gains related to foreign property before the taxpayer qualifies as a non-resident citizen.

Mr. Stross noted that next steps included re-introducing of the bill in the new 116^th Congress and assigning a new bill number and, requesting the Chairman of the Ways & Means Committee to hold hearings on the bill in order “to get [the bill] the attention it so rightly deserves”.   Hearings by the House Ways & Means Committee will help to define issues, such as, whether failing to file a foreign bank and financial account report would disqualify someone from the legislation due to compliancy requirements, as was noted by Craig Thompson, independent tax advisor who participated in the webcast. Stephane Lagonico, lawyer and independent trust and estate practitioner who also participated in the webcast, added that more definition is needed to understand how the legislation will interact with the other parts of the tax code. 

“Response to the webcasts has been very positive and the community has written ACA and ACAGF expressing how important it was for them to hear about this legislation from the Office of Representative Holding.  ACA will be working to make the content from these webcasts more widely available in the coming days,” added ACA Executive Director Marylouise Serrato. 

For full audio of both the March 13^th and 14^th webcasts click here.

American Citizens Abroad (ACA) announced today that it has accomplished its goal of $75,000 to fund its efforts for Residency-based taxation (RBT).

Washington, DC

November 21, 2017

ACA’s sister organization, American Citizens Abroad Global Foundation (a section 501(c)(3) charitable organization) began a crowd-funding campaign in March to raise funds for revenue estimation of its RBT approach and to present this work to key offices in the Administration and Congress. On November 7th, District Economics Group (DEG), an independent economic consulting firm, concluded the work and determined that “it would be possible to reach a revenue neutral budget score within the ten-year congressional budget window of 2018 through 2027.” 

See: https://www.americansabroad.org/media/files/files/dc1e1c4e/DEG_short_memo_on_RBT_proposal_11.06.2017.pdf.

“Although RBT was not included in the House-passed version of H.R. 1, we believe that offices in the Senate are looking to include RBT language in the Senate’s version of H.R. 1,” said Charles Bruce, ACA Global Foundation Chairman and ACA Legal Counsel.

ACA’s revenue estimating work is invaluable to the community of Americans overseas. The knowledge gained about the community – size, asset make-up, analysis of tax treatment –helps with ACA’s advocacy work on a variety of issues facing the community, tax policy being merely one of them.

“ACA thanks the community for its support with the fundraising,” added Marylouise Serrato, ACA Executive Director, “Donations came in all shapes and sizes and clearly showed that the community of overseas Americans appreciates ACA’s advocacy work on tax reform.”

ACA will continue the important work on tax reform in the next weeks, advocating to the Senate and continuing the conversation with key offices in the House, such as Congressman Holding’s office. Congressman Holding went on the record several times strongly supporting a Residency-based taxation system.

See: https://www.c-span.org/video/?c4692161/congressman-holdings- comment-rbt.

“Our fundraising efforts aren’t over,” added Charles Bruce. “For ACA to continue to do the work needed with Congress and the Administration, we absolutely need the support of the community and other interested parties. ACA will continue to raise funds to support this important work. Since ACA Global Foundation is a voluntary organization, all funds go to revenue estimators and the like.”

Contact: Marylouise Serrato +1 202 322 8441.

March 21, 2017
Washington, DC
 
Congress is slated after the summer recess to take up the issue of comprehensive tax reform. The upcoming tax-reform process is focusing on residence-based taxation changes for US foreign businesses, and American Citizens Abroad (ACA) advocates working to persuade Congress that the tax law should include residence-based taxation for individuals as well. Currently, Americans living overseas are taxed in the US based on citizenship.
 
“Residency-based taxation for individuals is a relatively straightforward exercise and does not risk ‘muddying the water’ for changes regarding corporate international taxation. There are no obvious roadblocks to undertaking this step,” said ACAGF Chairman Charles Bruce.
 
ACA’s ongoing advocacy efforts have raised awareness of the problems facing Americans living overseas and have provided proposals for treatment to alleviate tax compliancy problems. Now ACAGF is raising funds to commission a professional "scoring" or revenue estimates required to persuade Congress that tax reforms that would benefit individual American expatriate taxpayers are feasible and cost-neutral.
 
“The tax-writing and other committees and Member offices that ACA has met with are all familiar with ACA’s approach to residency-based taxation of Americans overseas, and meetings in these offices lead us to believe that legislation making this change is eminently doable,” said ACA Executive Director Marylouise Serrato. “The House Republican ‘Blueprint’ for tax reform states that the Ways and Means Committee intends to address the treatment of individuals living and working abroad, opening the door for this important change.”
 
This urgent "specified-need" fundraising campaign is being conducted by American Citizens Abroad, Inc.’s sister organization, American Citizens Abroad Global Foundation, which is a section 501(c)(3) tax-exempt publicly-supported charity (http://acaglobalfoundation.org/donate). Donations to ACAGF are tax-deductible. Details about the work are found here on ACA’s website at: https://www.americansabroad.org/nows-the-time-for-rbt-donate-today/
 
For more information contact:  Marylouise Serrato +1 202 322 8441 or info@americansabroad.org.

Now’s The Time – Start Taxing Americans Abroad Like Other Countries Tax Their Citizens

 

Donate today to this important work.  Your donation is tax deductible.  Donate today.

The United States taxes on the basis of citizenship. This means it taxes American citizens on their worldwide income regardless where they live. An American citizen living in London, or Toronto, or Tokyo, or Johannesburg, generally must file U.S. tax returns and pay U.S. tax, even if he or she does not live in or travel to the U.S.  Taxation is not based on any physical presence test.  The source of the income makes no difference either: income exclusively earned and additionally taxed abroad is also subject to U.S. reporting. Moreover, Americans abroad are commonly taxed twice, for example on some types of investment income and certain retirement-savings vehicles.  In some cases, where an individual was born in the U.S. to foreign parents on a student or temporary work visa who then returned to their home country, those subject to the tax law and its penalties may not have not been aware of their status as an American birthright citizen.

This is not the worldwide norm.  The United States and, arguably, the small African country of Eritrea are the outliers in taxation based on citizenship regardless of residency.

 

 

THE TIME HAS COME TO SWITCH FROM THE CURRENT CITIZENSHIP-BASED TAXATION (CBT) APPROACH TO RESIDENCY-BASED TAXATION (RBT). 

Is this possible? Yes, if we immediately do several things.  American citizens need to get behind a well-conceived proposal, which is revenue neutral – it doesn’t cost the Treasury anything in lost revenue – and addresses the potential for tax abuse and evasion. To do this, first we need to do our homework by preparing comprehensive revenue estimates for legislators and providing a clear data package to show that the change from CBT to RBT can be made revenue neutral.  ACA is undertaking this important work now and needs everyone’s help!

Will Congress take this step? Yes, ACA believes that now is the opportunity. International tax rules for corporations are being revised currently, and enactment of some form of territorial taxation for corporations is almost a certainty. This means that companies’ foreign earnings will not be taxed or will be taxed at a reduced rate. Residency-based taxation (RBT) for U.S. citizens overseas follows the same principle that legislators are being asked to accept for America’s global businesses.

How will this happen, and how can you help? American Citizens Abroad Global Foundation (ACAGF) is raising funds to pay for high-quality revenue estimates on conversion from CBT to RBT using the ACA’s “Baseline” approach as a starting point for revenue estimating.  This process—known as “scoring”—will allow the development of the best possible proposal and will help to ensure its enactment.  Click here for details.

Have questions about ACA’s “Baseline” approach?  See Frequently Asked Questions for answers.

Funds are being raised now to begin the “scoring” process with an established economic consulting firm, but we need your help to support this ongoing effort.  Now is the moment for this reform.  Your donation to the fundraising is tax deductible.  For individuals with access to a corporate donation-matching program, please consider asking your employer to amplify your contribution.  Donate today.

Through ACA Global Foundation’s research and canvassing of members, ACA discovered a serious need for State-Side banking services for Americans living and working overseas.  ACA, Inc., ACA Global Foundation’s sister organization has now provided that product with the ACA/SDFCU account.  To learn more about this great, new member benefit, see:  https://www.americansabroad.org/sdfcu-account/

University of Nevada, Reno and American Citizens Global Foundation offer report on impacts of tax legislation

Americans Abroad Global Foundation (ACAGF), in conjunction with the University of Nevada, Reno released results today on a new study finding that most Americans overseas feel the Foreign Account Tax Compliance Act (FATCA) negatively impacts their professional pursuits and that compliance is over burdensome. The majority of respondents’ perception was consistent with the sentiment that the U.S. government is not concerned about the impact of FATCA on its citizens living abroad.

Since the United States taxes U.S. taxpayers on worldwide income (citizenship-based taxation, CBT), Americans living overseas have always had to comply with various special provisions, such as the foreign earned income exclusion (FEIE), foreign tax credit, housing provisions, and disclosure requirements. FATCA is a part of the Hiring Incentives to Restore Employment (HIRE) act, signed into law in March 2010. FATCA is a means to increase compliance by U.S. taxpayers with foreign accounts.

The survey was conducted between June 16 and Aug. 15, 2015, with 684 useable responses collected. The survey was deployed using a web-based approach among a cross section of adults ages 18 and older, living in more than 60 countries. Some key findings:

• Of the respondents, 64 percent voted in the 2012 Presidential Elections significantly higher than the turn out rate of the average American voting stateside

• Seventy-eight percent (78) of respondents felt having to comply with U.S. tax law puts them at a professional disadvantage compared to others working in their country of residence

• Eighty-six percent (86) of respondents said that FATCA needs to be reworked to allow Americans overseas access to banking services and include a “Same Country exemption” provision (i.e., no reporting requirement for accounts held in the same country of residence)

• Overseas Americans generally felt the IRS was not keeping them informed about how to comply with evolving tax laws

“The consensus from this sample of Americans abroad feels that the U.S. government does not recognize how the FATCA legislation is negatively impacting them, limiting their ability to maintain legitimate banking and financial relationships and, that in many respects, simply does not care how the legislation is affecting a community of law-abiding citizens who have chosen to live overseas for work or personal reasons,” Sonja Pippin, Associate Professor in Accounting at the University, said.

“These survey results are important,” Charles Bruce, ACAGF Chairman, said. “They will be used as a baseline for informing the public, creating educational programs and advocating for legislative changes to address the issues of Americans abroad.  Survey results indicate that Americans want to comply with tax laws but want sensible simplification of the rules, including a “Same Country” provision, outreach from the IRS on how to comply, and want to vote for representatives who understand their issues.”

For full report see: http://www.unr.edu/business/research-and-outreach/accounting-research

 

FATCA has been debated in the US and abroad among politicans, businesses and American taxpayers living overseas and/or with ties to other countries. While its intent on reducing or eliminating tax evasion is almost universally supported, many feel the law increases the compliance burden on many taxpayers and institutions.

 

ACA's sister organization, American Citizens Abroad Global Foundation (ACAGF) in cooperation with the faculty of the University of Nevada, Reno's College of Business have announced a research project to study the effects of FATCA on American citizens living abroad. The survey will provide researchers with the opportunity to evaluate how taxpayers experienced this new law and will provide information about unintended consequences. "Being able to evaluate the responses from a large group of taxpayers from all around the world will provide us with a much richer picture of FATCA's impact on individual taxpayers and will help us study aspects of the law that cannot be assessed by tax return data alone," said Sonja Pippin, associate professor in accounting.

 

"ACAGF is pleased to see academic institutions like the University of Nevada, Reno (UNR), take interest in canvassing Americans' opinions on US legislation. Cooperating with UNR on this important survey topic will help ACAGF further its understanding and knowledge of how FATCA is affecting the community of Americans overseas and help us to better educate Congress on this and other important issues," Charls Bruce, ACAGF Chairman said.

 

Take the survey: https://www.surveymonkey.com/r/ACA_FATCA