US Action

Fighting Citizenship Based Taxation:

The US practice of Citizenship Based Taxation is the source of the problems faced by US citizens living in Australia. Heitor David Pinto has written an essay outlining a legal argument that Citizenship Based Taxation is unconstitutional in the US. While the Australian government can do nothing to address this directly, there are organisations and people working to change this practice.

This page serves as a repository for opportunities to take action in the US. Please post links to relevant news stories and blog posts in the comments.

37 thoughts on “US Action”

  1. Re-posted from Facebook:

    Nothing ventured, nothing gained. We should e-mail and tweet the four moderators for the upcoming US Presidential Debates and US Vice-Presidential Debate regarding FATCA and Citizenship Based Taxation.
    26 September Debate
    Lester Holt: lester.holt@nbcuni.com / @LesterHoltNBC
    9 October Debate
    Anderson Cooper: anderson.cooper@turner.com / @andersoncooper
    Martha Radditz: martha.raddatz@abc.com / @MarthaRaddatz
    19 October Debate
    Chris Wallace: chris.wallace@foxnews.com / @FoxNewsSunday
    Vice-Presidential Debate: 4 October
    Elaine Quijano: elaine.quijano@cbs.com / @elaine_quijano

    http://www.nytimes.com/2016/09/03/business/presidential-debate-moderators-lester-holt-chris-wallace.html?_r=1

  2. Re-posted from Facebook.

    IMPORTANT!!! Rep. Mark Meadows (R-NC) has announced HR5935, which effectively calls for the repeal of FATCA. The bill is nearly identical to the Senate bill authored by Sen. Rand Paul in 2015 and is a step forward in the legislative process to repeal FATCA. With this bill, Rep. Meadows is making a strong statement in support of the privacy and constitutional rights of 9 million overseas Americans. https://meadows.house.gov/sponsored-legislation

  3. In the wake of the US election, there are several expat groups/sites that are organising letter-writing campaigns and tweet-storms aimed at the Transition team.

    A good place to start is http://isaacbrocksociety.ca/lobby-the-new-us-government/

    Another article: http://citizenshiptaxation.ca/nows-the-time-heres-what-they-promised-lets-hold-them-to-it/ (re-posted with comments open at http://isaacbrocksociety.ca/2016/11/09/nows-the-time-heres-what-they-promised-lets-hold-them-to-it/

    Plus there are discussions ongoing at https://www.facebook.com/groups/citizenshiptaxation/

    Please post any other resources/sites as replies below.

  4. The BBC World Service is preparing a radio show titled “The Response – America’s Story” – they’re looking for 2 minute voice clips on “What do you want to tell President-elect Donald Trump about who you are and the life you lead?” Details here. (HT American Expatriates FB Group).

  5. Dear President Trump: Why I’m Leaving America

    Taxes #​TaxTimeJAN 23, 2017 @ 08:52 AM 1,996 VIEWS
    Dear President Trump: Why I’m Leaving America

    Robert W. Wood , CONTRIBUTOR
    I focus on taxes and litigation.

    Opinions expressed by Forbes Contributors are their own.
    I did not write this letter. It is a blend of a number of them I have received enunciating reasons that record numbers of Americans are renouncing their U.S. citizenship. Despite the huge protests President Trump has already drawn over social issues, and despite petitions for him to release his tax returns, other reasons motivate these renunciations. They are personal to many Americans living overseas, and are issues President Trump inherits. There is some room for hope, but whether he will remedy them remains to be seen.

    Dear Mr. President,

    I am writing with a heavy heart as I prepare to give up my U.S. citizenship. My spouse too. We are not doing so to avoid paying U.S. taxes, but because we object to a system that is discriminatory and unfair to law-abiding Americans living outside the country. I hope you continue reading, as I get the sense that homelanders typically shrug off our complaints as sour grapes and tax avoidance. It is anything but.

    Taxing Passports

    It has become too expensive, too difficult, and frankly, too frightening, to try to comply with all of the tax filing requirements that now apply to U.S. citizens living abroad. With FATCA, even opening a local–but to the U.S. a “foreign”–bank account is difficult because I am American. In Canada where I live, many of us are dual U.S. and Canadian citizens. Having two citizenships comes with privileges—such as voting in both countries. It also has burdens, such as paying taxes in both countries. Up to a point, that is OK.

    Notably, despite our U.S. status, many of us do not receive U.S. Social Security or Medicare. That means we take nothing from the U.S. Yet, we now feel like second class citizens or even criminals. For many of us, including many dual U.S. and Canadian citizens, taking on another citizenship, was not disloyal to America. In some cases, job requirements make a second citizenship either required or a good idea.

    But whether or not Americans abroad acquire a second citizenship, living abroad subjects us to burdensome tax and disclosure rules and unfair retirement account treatment by the U.S. The FBAR forms we must file every year, detailing the amount in every single financial account we have, from savings to checking to investment to retirement accounts, are filed with the Financial Fraud Division of the U.S. Treasury Department. The message given here, along with the enormous fines for improper filing, make U.S. citizens feel like they are guilty until proven innocent.

    Simple investments such as mutual funds, easy for those living in the U.S., are not easy for Americans abroad. Unless we are very careful, we end up with funds classed as foreign by the IRS. The taxes and compliance can be excessive. Banking and retirement accounts rules are truly discriminatory for U.S. persons abroad. Some retirement accounts abroad are still taxed by the IRS, even though they are held for retirement.

    Even a Canadian mutual fund is treated far different than an American one. These are not funds that are investing in terrorist activities in the Mideast. These are funds that are invested heavily in U.S. bonds and U.S. companies, as well as in Canadian bonds and companies. The IRS considers Canadian mutual funds as “foreign investments“, they are local investments for those living in Canada.

    American citizens living abroad are at a distinct disadvantage in planning and saving for our retirement. What have we done to deserve this discriminatory and second class treatment? Some costs and inconveniences are to be expected. Filing taxes in multiple countries means extra professionals and extra expense. But how much extra is fair?

    The broader context is America’s global tax system and FATCA, which has also made life difficult for U.S. persons abroad. This is especially true when it is the Fraud Division that investigates even the most innocent errors in filing some of the necessary forms. Today, the overall burden and the unfairness have become too heavy to reasonably bear.

    There are approximately one million Americans living and working in Canada, and millions more in other parts of the world. We are not alone in taking the previously inconceivable step of relinquishing our U.S. citizenship. What a sad state of affairs for America.

    Regretfully yours,

    A Canadian–and American

    http://www.forbes.com/sites/robertwood/2017/01/23/dear-president-trump-why-im-leaving-america/#e2441e544a23

  6. I live in Australia rather than Canada – but otherwise I could have written this letter. Our retirement accounts (superannuation) are equivalent to social security and should probably be exempt from US tax under the tax treaty and the Social Security agreement – but most US tax professionals have treated them as employer pensions (402(b)), so now that’s what the IRS seems to expect. Similarly, I don’t think Congress had long-term expats in mind when the Passive Foreign Investment Company rules were passed in 1986. There is no policy reason (other than forcing expats to “Buy American”) for treating RETAIL mutual fund investments as PFICs. Indeed, until about a decade ago, I don’t think anyone reported these investments as PFICs – then some “conservative” tax professional decided that this was the “safe” interpretation, and now this is what the IRS expects.
    Between retirement accounts, PFICs and FATCA, the US has made it nearly impossible to live a middle-class life as a US citizen outside of the US.
    Top CommentREPLYFlagPermalink
    Robert W. WoodAUTHOR
    Robert W. Wood 8 hours ago
    Thank you. Yes, I agree, and arguably, the superannuation problem for Australian-Americans makes you much worse off than most U.S.-Canadians. Between that and PFICs, you are indeed between a rock and a hard place.

  7. I’m sorry to say mate but this issue has been put on the backburner with the current change in administration over in the US.

    I’m sure you’ll have heard the news about Trump withdrawing the US from the Trans-Pacific Partnership. At this stage the Government does not expect changes to the Australia-US Tax Treaty in the near future.

    The Treasurer’s office has asked me to pass along their apologies that no action will be able to be taken on this matter for the foreseeable future.

    Yours sincerely
    Ross

    t. 07 3893 3488
    e. ross.vasta.mp@aph.gov.au
    W: http://www.rossvasta.com.au
    FB: /rossvastamp
    Insti: /rossvastamp

    1. JakDac – that Bloomberg newsclip is over 2 years old (and not actually very sympathetic to the plight of US citizens living outside the US).

  8. If you have google voice or hangouts (free calls to US) ask the Senate Finance Committee what they are doing about Expat tax / tel 202 224 4515

    1. Thank you for posting this, Martha. I think it is important for all US expat advocacy groups to have a respectful dialog about the best ways to assist the affected populations around the world.

      I have two comments on the content of ACA’s testimony:

      First, I believe the Same Country Exception is an inadequate remedy for the following reasons:

      • There is no credible evidence that banks will play ball. As long as the 30% penalty is in place for foot-faults, some banks will continue to manage their risk by denying accounts to US citizens.
      • There are many legitimate reasons to hold a bank account in a country other than where you live. SCE disadvantages Americans living in countries with under-developed banking systems as well as those in trade zones such as the EU, where cross-border transactions are common.
      • The ACA SCE proposal applies to individual accounts only. Entrepreneurs and those whose employment includes signature authority will still be frozen out of bank accounts.
      • FATCA requires much more information on “overseas” accounts than on domestic accounts and is an invasion of privacy. In the hearing, Prof. Elise Bean asserted that FATCA reporting was just like a 1099. However, when my bank information is reported to the IRS via a 1099 a) the IRS only gets interest/dividend income, NOT the account number and balance; and b) I automatically get a copy of the information provided to the IRS. Not only does FATCA reporting include the account balance, but in many countries the account holder is not automatically told what information has been reported about them to the IRS. Only a full repeal of FATCA will address this concern.
      • FATCA exposes American expats (and those claimed by the US as citizens without their consent) to unintended risks as illustrated by this fictional, but plausible story.

      Second, the ACA RBT proposal is not what most US expats are familiar with when they hear the term Residence Based Taxation. The ACA RBT proposal requires taxpayers to buy their tax freedom and the right to be taxed based on residence with a $2,350 IRS fee. Furthermore the proposal requires annual reporting including FBAR for those citizens who have bought the right to RBT. My comments on this proposal are available here ( and here with discussion).

      For those who missed it a Congressional hearing on Reviewing the Unintended Consequences of FATCA was held on Wednesday 26 April 2017. You can find a video of the entire hearing here:

      And a followup press conference hosted by Republicans Overseas here:

      Analysis and discussion of the hearing is available (on the Isaac Brock Society website).

  9. Reposted from my email:

    Subject: FATCA call to action

    Good morning – Anthony and I have created a ‘do it yourself guide to help repeal FATCA’. Our goal is to share this in as many places as possible. We want to blow up social media with #FATCA and #repealFATCA.

    Basically, it’s a listing of those who want to repeal FATCA, those who don’t, and those who think that the Same Country Exception is a good idea. We’re asking people to reach out to them via Twitter, Facebook, email, and phone to respectfully express their opinions on FATCA.

    The more “Regular Joe’s” we can get to reach out to them, the better. Let’s show them that FATCA doesn’t affect terrorists and drug dealers, but regular US Taxpayers who are getting screwed.

    You can share anywhere you feel appropriate, or forward on to anyone you think could help.

    If anyone has feedback or can think of anyone that should be added to the list, please let me know. I can easily edit. Keep fighting the good fight.

    Link here: https://www.irsmedic.com/blog/2017/05/fatca-contact-information-fatca.html

    Claudine Gindel

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