Americans living outside of the US have been given a boost in their fight against what they deem to be unfair taxation.
Democratic congresswoman Carolyn Maloney has tabled the Overseas Americans Financial Access Act and the Commission on Americans Living Overseas Act of 2019.
The former will direct the Internal Revenue Service (IRS) to exclude any US citizens who live in countries where they qualify as bona fide residents from the Foreign Account Tax Compliance Act (Fatca).
Bona fide residency happens when a person has stayed in a foreign country that has an income tax treaty with the US for at least a full tax year (1 January through 31 December).
It will also make it easier to open and maintain foreign private bank accounts.
Change at last?
The latter will create an executive bipartisan commission of 10 members to examine the concerns of US citizens overseas.
“Americans who live and work abroad are forced to contend with unsustainable tax burdens as an unintended consequence of US law, but we can change that by passing my Overseas Americans Financial Access Act of 2019,” Maloney said on 17 September.
“They are full citizens who pay taxes, vote, and are affected by American laws. Which is why we need to look at how all our laws – not just the tax code – are affecting these Americans just as we would study how laws affect our constituents living in the United States.
“So, I am also once again introducing the Commission on Americans Living Abroad Act to create a commission tasked with studying the specific impacts of American legislation on overseas Americans.
“These changes are long past due.”
‘Unfair burden’
Julia Bryan, chair of Democrats Abroad International, said: “We are pleased to see these two pieces of legislation being introduced in the 116th congress – one providing important relief from Fatca reporting and one designed to ensure that existing laws and future laws are prevented from causing us unintended harm.
“We expect they will also help profile the urgent need for a switch from our current system of citizenship-based taxation to a system of residency-based taxation to end the double taxation of Americans abroad.”
Johanna Dishongh, US liaison at the Federation of American Women’s Clubs Overseas (Fawco), said: “Current US legislation and the associated cost of compliance has created an unfair burden on law abiding American living and working outside of the country’s border.
“We hope that all members of congress will support this legislation to amend foreign account reporting.
“Access to banking and financial services is vital to allowing one to be a functioning member of today’s society.”
