Good news on passport revocation: the House rejected the Senate version of H.R. 644 (Trade Facilitation & Trade Enforcement Act, a.k.a. the “customs bill”) and substituted it with their own version, which passed in a largely party-lines vote. The House version of the bill does not include Senator Orrin Hatch’s provision to deny new U.S. passports and revoke existing passports of people who have outstanding unpaid taxes or form crime fines, or who do not provide SSNs (it is not clear whether this would deny passports to passport applicants who never had SSNs in the first place).
Also, as Tim alerts us in a comment, Section 603 of the Senate version of the Trade Preferences Extension Act (H.R. 1295) — which would have required U.S. banks to report accounts with zero or de minimis interest to the Treasury, in what could have been another step towards the alleged reciprocity that Treasury mendaciously promised it would offer FATCA “partner jurisdictions” — was removed from the House version of the bill before its overwhelming passage.
This does not mean that these provisions are dead yet. Both bills will now go to conference, where the Senate conferees will have the opportunity to pressure the House to reinsert the sections that they dropped. Separately, H.R. 1314 (the Trade Act, or colloquially the “trade promotion authority & trade adjustment assistance bill”), which contained a provision to deny the refundable portion of the child tax credit to filers who take the Foreign Earned Income Exclusion, failed to pass; it may be scheduled for another vote in a few weeks.
The gory details
As always, trying to keep tabs on Congresscritters involves a giant paperchase (or its electronic equivalent). I ended up at the correct destination only by a rather roundabout method: I went to the website of the House’s Office of the Clerk, where you can find a summary of Friday’s legislative activities. (You can also see video here), and stumbled around until I found entries relevant to H.R. 644:
|11:45:47 A.M.||H.R. 644||DEBATE – Pursuant to the provisions of H. Res. 305, the House proceeded with one hour of debate on the Tiberi motion that the House concur in the Senate amendment to the title of H.R. 644 and concur in the Senate amendment to the text of H.R. 644 with the amendment printed in part A of the House Report 114-146 modified by the amendment printed in part B of the report.|
|2:15:34 P.M.||H.R. 644||On motion that the House agree with an amendment to the Senate amendments Agreed to by recorded vote: 240 – 190 (Roll no. 363).|
Both the amendments to H.R. 644 and H.R. 1295 were in fact substitutes which rejected the Senate versions of the bills and replaced them with House versions which did not include the provisions of interest to us. (For the amendment to H.R. 644; see page 6 of H. Rept. 114-146; as you can see, it does not include Title X of the Senate bill, which held the “revenue offsets”, among them, passport revocation. The second-degree amendment — “modified by the amendment printed in part B of the report”, at p. 103 — solely concerns Title VII, the controversial currency-manipulation provisions of the bill. The amendment to H.R. 1295 can be found at page H4139 of the Congressional Record.)
What happened in the Committee on Rules
House Report 114-146 was the Committee on Rules’ report on House Resolution 305. That resolution provided for consideration of both H.R. 1314 (which ended child tax credit refundability for FEIE users) and H.R. 644 (the “customs bill”, which had passport revocation), with amendments by the Chairman of the Committee on Ways and Means, Paul Ryan (R-WI), or his designee (who turned out to be Pat Tiberi, R-OH). The report also discusses the motion for consideration of H.R. 1295 (the bill that had the “DATCA” interest-reporting expansion)
In committee, Jim McGovern (D-MA) tried to move:
Motion by Mr. McGovern to amend the rule so that the Ryan amendments to H.R. 644 and H.R. 1295, as well as the Senate amendment to H.R. 1314, are all subject to amendment on the floor, and considered under an open process. Defeated: 4-9
It’s not clear if House Democrats would have used that opportunity to reinsert the passport-revocation provisions. (I think it’s quite unlikely they would have used it to reinsert the interest-reporting provisions: Homeland politicians on either side of the aisle do not want to see their own banks subject to the same garbage which they’ve imposed on the rest of the world with FATCA, they want to put competing tax havens out of business so that #1 Tax Haven USA is the last one standing.)
In any case, McGovern’s motion was defeated 4–9 in a strict party-lines vote. Other Democratic attempts to provide for amending the bills in question (mostly H.R. 1314) were also voted down, and instead the resolution was reported in its original form.
H.R. 1314: FEIE & child tax credit
In an an article that Publius pointed out six weeks ago, we learned that both chambers supported denying the refundable portion of the child tax credit to the diaspora in order to pay for Homelanders’ health care:
Tax Committees Approve Health Care Tax Credit. Members of Senate Finance and House Ways & Means committees voted to extend the Health Coverage Tax Credit (HCTC) for American workers who may be negatively impacted by foreign trade. The tax credit covers 72.5 percent of an eligible individual’s health care premium cost. Under the House Trade Assistance Adjustment (TAA) bill (H.R. 1892), the credit would be extended retroactively from 2014 to the end of 2019. The HCTC provision would cost approximately $173 million over ten years according to the Joint Committee on Taxation. Both of the tax-writing committees aim to pay for the extension by eliminating the refundable portion of the child tax credit for American taxpayers living abroad who claim the foreign earned income exclusion under Section 911 of the tax code.
The Senate ended up sticking these provisions into Section 209 of H.R. 1314:
SEC. 209. Child tax credit not refundable for taxpayers electing to exclude foreign earned income from tax.
(a) In general.—Section 24(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
(5) EXCEPTION FOR TAXPAYERS EXCLUDING FOREIGN EARNED INCOME.—Paragraph (1) shall not apply to any taxpayer for any taxable year if such taxpayer elects to exclude any amount from gross income under section 911 for such taxable year.
(b) Effective date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2014.
The House did not try to substitute H.R. 1314 with their own version. However, they scheduled separate votes on concurring with various portions of the Senate amendments. The first vote, regarding Title II (the extension of trade adjustment assistance, which includes the above child tax credit provision), went down in flames: nearly two-thirds of Republicans and almost four-fifths of Democrats voted against it. The House was much less opposed to Title I, the portion of the bill which had trade promotion authority: 54 Republicans voted against it, but conversely 28 Democrats joined the Republicans, just enough to create a majority on that question. Nevertheless, H. Res. 305 provided that if any of those votes failed, the House would be considered as having rejected the whole thing.
Ironically, The Atlantic credits this development to pressure from labour unions, in particular the AFL-CIO (yes, the same AFL-CIO which has spent years screaming that anyone who opposes FATCA must be an evil fat-cat tax evader, and which has praised the Congressional Progressive Caucus’ “Budget For All” which attempted to repeal the FEIE entirely).
@Don, they are asking place of birth when the truth is they should be solely asking, “Are you a US Citizen?”
I have zero problem answering that question because I can answer it truthfully as NO.
Why are they asking or being allowed to ask place of birth when the sole question should be a yes/no Are you a US Citizen.
Still no clue on schedule for customs bill (passport revocation) conference
Another source says it definitely won’t happen before the recess
Senate asked House for conference on customs bill. Here’s McConnell’s speech (like all the others, no mention whatsoever of the passport revocation provisions)
The Hill has more:
DATCA dead: Senate concurs in House amendment to H.R. 1295 (Trade Preferences Extension Act). I.e. reporting on U.S. accounts without interest is dead as a doorknob. Someone tell all the FATCA “partner jurisdictions” who are still on crack & think they’re gonna get reciprocity from #1 Tax Haven USA.
Passport revocation headed to conference: Senate insists on own amendment to H.R. 644 and appointed conferees: Orrin Hatch (R-UT), John Cornyn (R-TX), John Thune (R-SD), John Isakson (R-GA), Ron Wyden (D-OR), Chuck Schumer (D-NY), Debbie Stabenow (D-MI).
Thanks, Eric for keeping us up to date.
Motion to go to conference on H.R. 644 (the customs bill, whose Senate version has passport revocation in it) is on the House Majority Leader’s schedule for “possible consideration” on 15 July (Wednesday) or sometime later next week
Well, House didn’t get around to the HR 644 conference motion this week. Two weeks left till the August recess …
Earlier this week, trade folks were already getting antsy about the delays:
H.R. 644 conference resolution not even on the calendar this week
On the other hand, they’re considering a terrorist passport revocation bill this afternoon (H.R. 237)
Looks like the Senate has given up on trying to get passport revocation into the customs bill; they’ve shoved it into yet another highway bill instead
Further discussion on the new highway bill over here:
Various U.S. libertarians finally noticed the passport revocation provisions, now that they’re in the highway bill (which they hate) instead of trade bills (which they liked)
@Eric, thanks for keeping up with this and other important issues – and helping the rest of us understand their import.
Those who seek to punish anyone deemed a ‘USperson’ who ‘left’ (or who were born and never lived in the US) just keep finding devious ways to do so.
I can’t see how it would be possible for individuals alone to keep up with and track it over a lifetime of being a US citizen ‘abroad’ in order to survive unscathed.
The Highway Bill with the passport revocation has moved along farther. H.R. 22 is currently in the conference committee waiting for the differences between the Senate and the House version to be reconciled into an agreed upon version. Conference is the last point at which the text of the bill can be changed. Anything can (and does) happen in the conference committee, but this isn’t looking good. After conference, it will be accepted or rejected.
If fines are part of tax debt, I would suspect that many people will be caught out. I know U.S. persons who will never owe the U.S. a penny in taxes until they retire, but they stick their fingers in their ears when I try to tell them about FBARs so I doubt that they are compliant. Some of them are duals, but not all.
Here’s the link:
Thanks for keeping an eye on this @Publius. The US appears to be obsessed with increasing the incidence and severity of their torment of those ‘abroad’ (the US citizens most likely to be impacted by the loss/cancellation/denial of renewals of their US passport; as even duals with a non-US passport are forced under US law to enter and leave the US only using a US one). Congress continues its current policy that since floggings to date have woefully failed to improve morale, even more flogging should do the trick (to paraphrase Phil Hodgen).
Allison Christians’ recent Tax Notes interview touches on that as a strategy:
https://youtu.be/GrSxlcx49hY (thanks so very much to Trish Moon for posting it for us https://citizenshiptaxation.wordpress.com/2015/11/20/allison-christian-interview-on-tax-notes/ ). Needs to be widely viewed!