American Citizens Abroad has posted an update with information concerning their efforts to replace Citizenship-based Taxation with Residence-based Taxation. They are also calling for testimonials about how legislation is affecting you and for your support in by writing the Tax Committee directly responsible for tax reform and asking for the implementation of RBT.
Update on Residence-Based Taxation RBT – August 2014
ACA has been hard at work in Washington, DC bringing RBT to the attention of the legislature and the Administration. ACA has met with all the members of the Americans Abroad Caucus, and the Ways & Means and Senate Finance committees. ACA has been asked by the committees involved in tax reform to provide our input on the tax treatment of Americans living and working overseas. We are proud that ACA is now the government “go to” source for information on many of the issues affecting overseas Americans, and we regularly submit comments to government hearings on issues important to our membership.
Media attention on the issues of overseas Americans is growing. More and more major media outlets like Bloomberg, CNN, Forbes, Time, Politico and others are talking about RBT and FATCA. Much of this attention is due to the ACA commitment to bringing the issues of overseas Americans to the attention of the media. ACA is regularly solicited for interviews and quoted in the media.
ACA was the first overseas organization to advocate for “Same Country Exception” for FATCA and the first to develop a specific detailed proposal for Residence-Based Taxation (RBT). ACA is pleased to see that other organizations such as Democrats Abroad and Republicans Overseas have picked up our messaging on FATCA and taxation and are also advocating to the Washington legislature and the Administration on this subject.
ACA’s Comprehensive Compliance Procedure was the basis of the recent IRS Streamlined Foreign Offshore Program, which allows a low- to no-risk process for Americans overseas to become tax compliant.
In addition, ACA was able to get a special provision inserted first in a number of Intergovernmental Agreements and then in the FATCA regulations, requiring local overseas banks not to discriminate against Americans if they want to qualify for certain types of favorable treatment. ACA is one of the few, if not the only, organization representing Americans abroad that has the expertise and working relationships to permit it to work on a technical level like this.
ACA continues to advocate on behalf of Americans living and working overseas and the organization is truly the Voice of Americans Overseas. ACA is listening to you and Washington is listening to ACA.
Send us your testimonials on how current legislation is affecting you. These testimonials are important to our advocacy work but even more important is your work in contacting your own Congressional representative. We ask you to write to your representative today and let him or her know your thoughts and personal experience, and please send a copy to ACA as well.
You can also support our work by writing directly to the Tax Committees responsible for tax reform and asking for RBT. Go HERE
In all your communications to Congress, if you need to use a US residential address, use your last known address in the United States, the same one from which you are registered to vote.
Lots of comments here about CBT. No comment about the Canadian-US tax treaty that lets CBT flow right through. The Canadian-US tax treaty is similar to CBT as IGA is to FATCA.
Perhaps lawsuit Mark II should be in regards to the Canadian-US treaty. The treaty may protect against changing laws in the U.S. Right now it is not protecting and any new U.S. tax may flow right through.
Here is the link to the RNC Resolution page showing the outcome of the summer session. Notice the Resolution supporting RBT. Great work Republicans Overseas!
— Barack Obama (24 July 2014) White House Transcript
“So let me just close by saying this. The hardest thing in politics is to change a stubborn status quo. It’s even harder when Washington seems focused on everything but the concerns of you.”
If only he could hear himself.
Wow. They did it.
Ok, Democrats Abroad, time to get off the stick and get the DNC to pass something similar!
Or else be prepared for loss of constituency.
From the Democrats Abroad home page:
So: Democrats Abroad officially supports RBT.
Good to see that on their official page. Source: https://www.democratsabroad.org/group/fbarfatca/august-2014-fatca-frequently-asked-questions-reference-our-work-reforming-fatca
Not so good to see the lame excuse for not doing anything about it. Of course there will be no support for change in Congress, until groups like DA make a big enough stink to make them pay attention to the issue. It is the JOB of groups like DA to make it into an issue for Congress, not so sit around waiting for Congress to spontaneously decide to get off their butts and care about the little person.
Come on, DA, let’s put a little more effort into this. As you say yourself:
The same applies to the CBT problem!
Interestingly, it is also being reported in comments to the Republicans Overseas facebook page that DA got the DNC to adopt a resolution in favor of a same-country exception to FATCA. (Though this is not reported on the Democrats Abroad home page yet.) Looks like there is supposed to be an announcement soon.
(It also looks, amusingly, like Democrats Abroad are in better communication with each other on the Republicans Overseas page than on their own! But good to see Repubs and Dems all talking in the same space with each other, at least.)
Actually, this whole set of developments (RNC adopting resolution on repeal of RBT, DNC reportedly adopting resolution on same-country exception for FATCA, DA’s public, official support of RBT) may warrant a separate new post or two or three, if they haven’t already been covered. Anyone?
@foo, agreed it would make a nice front page post.
It’s just possible that Congress might get a little more interested in discussing RBT if the United Nations were to condemn the practice of CBT worldwide. We have asked for nothing less in our recently filed Human Rights Complaint. We are waiting now to hear from the UN about the status of the Complaint.
@ MuzzledNoMore I truly hope that you are sucessful with the Human Rights Complaint. Any idea on how long you might wait for a response? I cannot believe that the US Government is doing this to people, ruining their lives both financially and healthwise and they just seem oblivious to the situation.
Anybody with the requisite skills up for making it so?
heartsick: We have no idea how long we’re going to have to wait for a response from the UN. The committee in charge of reviewing the complaints met last week (Aug. 18-22) and I would assume (the UN is a bureaucracy like any other) that it would take some time to process their decisions. I’m hoping we will hear from them in September. Be assured that news will be posted on Brock as soon as we hear.
Obama keeps telling other countries like China to adhere to international standards of behavior. Why isn’t the U.S. walk its talk and adhere to international standard that RBT is the accepted standard. Well, the usual double standard……….
I think that these are the key differences between 1913 and now:
* More tenuous citizenship ties of ‘U.S. persons’ abroad due to citizenship rule changes. The CBT case is less credible than it used to be because Americans abroad are much different from the stereotype.
* Americans abroad had no vote at all for most of the history of CBT and little awareness of or desire to fight against the policy. From what I have seen, CBT probably wasn’t a big vote getter in 1913, but politicians probably found it worth supporting because it wouldn’t actually cost them any votes.
* More middle-class investments from non-U.S. source income. Anger in 1913 and later was mainly about Americans living abroad on U.S. source wealth. In the late 1950s it was movie stars and authors deliberately doing work abroad instead of in U.S. to escape taxation when foreign earned income was excluded. Middle class people with bona fide foreign income were never discussed. Easiest area for pushing back likely to be things in the IGAs: at least in Britain, those accounts are funded out of British earnings of taxpayers. Even IRS seems to be pretending that Mexican afores issue is solved (in response to Nina Olsen), suggesting that even they don’t want to have to defend the tax law as it actually stands.
* Modern pro-CBT politicians are much less xenophobic than in 1913. CBT was originally bound up with some pretty nasty anti-immigrant and anti-European sentiment. It is certainly not true that CBT was supported by everyone simply out of fairness or the need to raise revenue. There are some pretty controversial statements from early pro-CBT politicians that have been rather conveniently overlooked.
Things that make it harder:
* Whole idea that Americans abroad sell U.S. values and goods not as credible as it was in the 1920s. Chamber of Commerce not as supportive in 1960s as it was forty years earlier and seems to be less so today. So the Treasury Department continues to be the source of problems, but Department of Commerce no longer as supportive of Americans abroad.
* U.S. deficit.
* The precedent argument, although I don’t find it so convincing given how much has changed.
* A big problem is investment income, where there has never been an exclusion.
Must get that Nancy Green book!
Great comment, Publius. Do get Nancy Green’s book – is it really good.
I would add one more and that is an domestic reaction against all things “foreign”. The world outside the US looks really scary and hostile to the homelanders. They don’t understand why any American would be so foolish to live out there where “everyone hates us.” They also have some very strange ideas about the protection that the US government affords it’s citizens abroad. Telling them that in a lot of places it doesn’t exist (or is really limited) just freaks them out. I just finished The Foreign Circus which was written by a former Foreign Service Officer and he says that US embassy security (those Marines) are NOT there to protect Americans inside or outside. They are there to ensure INTERNAL security at the embassies. That’s it.
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