ACA Urges Congress To Adopt Residence-Based Taxation
by Mike Godfrey, Tax-News.com, Washington
07 March 2014
American Citizens Abroad (ACA) has provided testimony to the Senate Homeland Security and Governmental Affairs Permanent Investigations Subcommittee following its recent hearing on offshore tax evasion, and has recommended that the United States should implement a residence-based tax (RBT) system to avoid penalizing American expatriates.
The ACA, as the principal organization representing Americans overseas, has limited its comments to tax issues which impact US citizens and green card holders resident overseas.
Under the current citizenship-based tax (CBT) system, Americans abroad remain subject to US taxation as though they were still US residents. Under RBT, only US residents, whether Americans or foreigners, would be subject to US income, estate and gift taxation, while Americans resident abroad would be taxed under essentially the same rules applicable to non-resident aliens.