Washington, D.C. (November 6, 2013)A bipartisan bill has been introduced in the Senate with the goal of simplifying income tax collections for taxpayers who work abroad.
Senators Sherrod Brown, D-Ohio, and John Thune, R-S.D., led a bipartisan group of senators Tuesday to introduce the Mobile Workforce Abroad Income Tax Simplification Act, legislation that would simplify and standardize expat income tax collection for employees who live outside of the US.
While some nations require income tax filing for as little as one day of work in the country, the Mobile Workforce Abroad Income Tax Simplification Act would establish an exemption to help ensure that an equitable tax is paid to the nation and jurisdiction where the work is being performed while alleviating employees and employers from burdensome US tax requirements.
“This common-sense legislation will help simplify and standardize foreign tax filing for Americans abroad who conduct business in other nations,” Brown said in a statement. “This is a great example of government working to reduce burdensome and confusing barriers to help ease the cost of doing business for Americans abroad.”
The bill would also help foreign financial institutions who must file withholdings and reporting requirements. Currently, individuals and foreign finanical institutions face up to 41 different state income tax reporting requirements that vary based on length of stay, income earned, or both.
“Americans abroad shouldn’t be burdened with complex tax reporting requirements because jobs in the modern economy involve work in various nations,” said Thune. “Our legislation would establish a clear exemption for foreign income tax purposes, preventing individuals from having to sort through the complicated tax reporting burdens where they live abroad. This legislation will greatly simplify expat income tax filings, is fairer to those residents in other nations, and should help to encourage tax compliance.”
Getting excited yet? Well, stop dreaming. The actual unedited bipartisan bill is not for you, of course. You are an expat with no representation and America doesn’t give a hoot about you.
Simplify? How about abolish.
Neither. The US won’t do jack for Americans living abroad.
“Americans abroad shouldn’t be burdened with complex tax reporting requirements because jobs in the modern economy involve work in various nations,” said Thune. “Our legislation would establish a clear exemption for foreign income tax purposes, preventing individuals from having to sort through the complicated tax reporting burdens where they live abroad. This legislation will greatly simplify expat income tax filings, is fairer to those residents in other nations, and should help to encourage tax compliance.”
Isn’t this part a bit encouraging though? Or am I just grasping at straws? Seems I might be because “help to encourage tax compliance” appears at the end. I’ve got three letters I’d like to send to the senators — R, B and T.
@Swisspinoy
I was bracing for something like that, as it seemed too good to be true. It may be some thing we can reference that parallels RBT, as a common-sense approach to tax reform. Maybe it’s something Shadow Raider can use.
@swisspinoy
What are you wasting our tine? I see you changed all references of “another state” to “another country”, “outside the US”, “abroad”, etc. I doubt I’m the only one who will interpret your words “The actual unedited …” to mean unedited in the sense that you’ve extracted bits of the original.
This is not funny.
The real first sentense of this article is:
For long term expats, it will be a hose job for sure. Bend over, here it comes again.
They’re not going to do anything for expats for a very long time. I do think when the FATCA fall out becomes more widely known and is shown to have been disgraceful treatment that it will become suddenly popular to ask for changes.
By then it will be far too late for those who were the recipient of such treatment over these last years. It will be like putting band aide on a decades old wound.
I gave up hope on the U.S. doing anything for expats well, except to bash us.
Em , BB et al. Unfortunately Swisspinoy is having a little fun at your expense.
Read the article. It refers to people working in different states; as in New York, california, Ohio and 47 more.
It aims to simplify reporting for US employers and FIs for employees who work in more than 1 location in a given year within the Excited states of America.
@Kal C….
thanks for the clarification
@Swiss PInoy…you little devil. 🙂
OH! Thanks for explaining, KalC. No more straw grasping for me I guess. Swiss Pinoy, sorry I read that too fast and missed the ending.
Em, You don’t need to grasp at straws.
@KalC
BB caught it off the bat, that’s why I said it could be used as a “reference that parallels RBT” and perhaps useful for Shadow Raider who’s advocating the US government to include RBT in tax reform.
As a matter of fact, I sent the article off to Shadow Raider hoping he can use it in his appeal. RBT may not seem so preposterous or foreign if the Committee on tax reform’s objective is to simplify the tax code. Thanks for posting it Swisspinoy.
Solution:
1. Simplified tax form to come into compliance (amnesty for those who are filing late)
2. Eliminate the %^*#ing PENALTIES for late returns and FBARs
3. Then switch to RBT!!! with the 2013 RETURN!
Otherwise it’s just pathetic lip-service and a non-action on the part of homelanders.
@WhatAmI, sorry for the twisted humor. My idea was to attempt to do something to show that some bills drafted for stateside Americans are actually really needed and make a lot of sense for the forgotten Americans living abroad. This bill is actually screaming that the US treatment of its expats is not just, and yet it totally ignores them.
The irony is bitter. Very bitter.
And to add to the irony, those living in the US object to the ‘extraterritorial’ double taxation of those who work in one state and live in another, but those of us who are being taxed where we have absolutely no connection at all except a parent or a birthplace, in an entirely other ‘foreign’ country, are ignored in the US
http://blog.oup.com/2013/10/metro-north-disruption-employer-convenience-double-taxation/
A congressman supports his constituents at home in the US who are being doubled taxed at the state level, but is not part of the Democrats supporting even a simple Presidential Commission to examine the plight of expats – including those who can’t get bank accounts in the countries where they live – due to fATCA and the HIRE Act http://minutemannewscenter.com/articles/2012/05/18/westport/news/doc4fb64a31c65d8704123631.txt
Note the 28 bi-partisan sponsors of the bill ‘Mobile Workforce State Income Tax Simplification Act’ I refer to in my comment just above. See the bill tracking link below:
https://www.govtrack.us/congress/bills/113/hr1129#overview
H.R. 1129: Mobile Workforce State Income Tax Simplification Act of 2013
Introduced:
Mar 13, 2013
Sponsor: Rep. Howard Coble [R-NC6]
Summary; https://www.govtrack.us/congress/bills/113/hr1129#summary/libraryofcongress
and also this bill: ‘Telecommuter Tax Fairness Act of 2012’
https://www.govtrack.us/congress/bills/112/hr5615
H.R. 5615 (112th): Telecommuter Tax Fairness Act of 2012
Introduced:
May 08, 2012 (112th Congress, 2011–2013)
http://thehill.com/blogs/floor-action/senate/192295-connecticut-senators-propose-ending-double-tax-penalty-for-telecommuters
http://gigaom.com/2011/11/11/senators-try-again-to-reduce-dual-tax-on-telecommuters/ http://online.wsj.com/news/articles/SB10001424052702304066504576345782284098222 http://files.ali-aba.org/thumbs/datastorage/lacidoirep/articles/PTL_PTXL0511-GOLUBOFF_thumb.pdf Note the emphasis on the unfairness of double taxation, the concern that the tax is levied without actual physical presence, and jurisdiction where the income is actually generated or earned, etc. There are even references to the ‘extraterritorial’ nature of the injustice of the double taxes levied. http://www.journalofaccountancy.com/Issues/2009/Jun/20091371.htm
Contrast those with the very low probability estimate, and US domestic concern for the one that would merely strike a Presidential Commission; “The bill, “The Commission on Americans Living Abroad Act” calls for the establishment of a Presidential Commission to study how Federal laws and policies affect United States citizens living in outside the United States.” according to the ACA http://americansabroad.org/issues/representation/being-heard-washington/
H.R.597
Latest Title: Commission on Americans Living Abroad Act
Sponsor: Rep Maloney, Carolyn B. [NY-12] (introduced 2/8/2013) Cosponsors (16)
Latest Major Action: 4/23/2013 Referred to House subcommittee.
http://thomas.loc.gov/cgi-bin/bdquery/z?d113:H.R.597:
Consider these bills in the context of the Obama and Democratic party presidential campaign promise of 2008 – which identified Americans abroad as a group of special concern that Obama and the Democrats made these pledges to:
http://obama.3cdn.net/610c7f29ee85b124a3_3cm6bxltu.pdf
‘BARACK OBAMA: SUPPORTING AMERICANS LIVING OVERSEAS’
“Americans abroad are uniquely aware of the impact that our government’s policies have on the rest of the
world ……. Obama understands the special concerns and issues of Americans living abroad and will seek to address these as president.
……….Strengthen Economic Security for Americans Abroad:
Barack Obama believes that the U.S. government
should pay close attention to how American citizens are treated in the private sector while they live and work abroad. “…
…”Our government must work to ensure that overseas Americans have every chance to compete on a level playing field, and he will work with Americans abroad to identify and understand problems they may face as a result of U.S. government policies…”
….Concerns of Americans Living Abroad:
Obama believes it is important to understand the role of
Americans abroad in determining U.S. policy. Obama will work with members of the Americans abroad community and the U.S. embassies to determine how the U.S. government can be responsive to the concerns of overseas Americans. As a U.S. Senator, Obama has taken seriously the concerns of all Illinoisans, whether they are currently in Illinois or not. As president, Obama will work to establish a direct dialogue with Americans abroad.
Other Governmental Services and Benefits:
Americans living abroad have little access to basic information about U.S. government services and affairs. Barack Obama believes that U.S. embassies and consulates, which are the main U.S. government contact points for Americans abroad, should develop and implement concrete plans on how to communicate basic information to Americans living abroad. Additionally, Obama supports efforts to ensure that U.S. State Department staff members have proper training to assist Americans abroad in determining their various rights and responsibilities as American citizens. He welcomes a continued dialogue between the White House, the State Department, and citizens
abroad in an Obama administration….”…
So if you are physically living, working and earning inside the US, actually using roads, services, etc., your double taxation can spur Congressmen and Senators to sponsor bills on your behalf, in order to address issues of unfair double taxation imposed ‘extraterritorially’ – across borders (state). But, if you merely had a US status parent but were born and live outside the US, or were merely born in a US border hospital, or during a visit to the US by your Canadian parents, then where are all those US representatives who care about double taxation across boundaries?
US representatives care about the future of those telecommuting in the US, but not about those doing the same types of work outside the US, who can’t even get or keep a legal local bank account, or prevent the US from criminalizing their assets and their lives abroad.
US representatives express concern about extraterritorial double taxation inside the US, but then enact FATCA and defend the US extraterritorial double taxes and penalties levied on those with no economic or substantive connection to the US. And we have not only paid one country’s taxes in full where we actually live and receive services and representation, but we also have paid the full provincial (equivalent to state) and municipal taxes in our home country – which is NOT the US.
Yes, the hypocrisy is smelling a tad ripe…
Is ACA informed about this? Perhaps the argumentation in Washington needs to be brought forward along these lines? Catch them in their own double standard?
My to-do list indeed includes a link to this bill. The Senate has time to vote upon honorary names for this or that, and now has a priority to make taxes easier for movement in states, but has no time to consider the hundred letters I have sent as have others. (The response to the Ways and Means had a hundred of our responses, but the issue between states wasn’t a subject of the letters I read.
Just a reminder that Shadow Raider said we should expect a word on tax reform from Baucus any day now.
BB says “Yes, the hypocrisy is smelling a tad ripe” But pomegranates were ripe in China a month ago. Each one is bagged on the tree. You might be able to buy them now in North America. They take special care of their fruit unlike homeland Americans do to Americans who live outside the country. Badger: I will spend Saturday reading your rant. Its kind of detailed.
Wow, 28 Sponsors and a 13% chance of being enacted! Now, if the bill is changed from “stateside” to “expat” then the sponsors will leave and the chance of it being enacted will drop to 1%, simply because expats have no representation.
https://www.govtrack.us/congress/bills/113/s887
Don’t forget this one has zero percent chance of passing. I see no cosponsors.