Rep. Maloney Renews Efforts to Reform Tax Laws for Americans Living Overseas

Rep. Carolyn Maloney at a press conference. Photo: Courtesy of Rep. Maloney's office

WASHINGTON, DC – On September 17, Congresswoman Carolyn B. Maloney, Americans Abroad Caucus Co-Chair, introduced two pieces of legislation, the Commission on Americans Living Overseas Act of 2019 and the Overseas Americans Financial Access Act. These bills will help American citizens living abroad who are unfairly and disproportionately burdened by existing tax laws.

“Americans who live and work abroad are forced to contend with unsustainable tax burdens as an unintended consequence of U.S. law, but we can change that by passing my Overseas Americans Financial Access Act of 2019,” said Rep. Maloney. “This community represents our nation as informal ambassadors all around the world, promoting American influence and goodwill worldwide. They are also 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 today, 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.”

“Democrats Abroad is delighted that the Americans abroad community has the on-going support of Representative Maloney,” said Democrats Abroad International Chair Julia Bryan.  “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.”

“The Association of Americans Resident Overseas (AARO), a non-partisan organization representing Americans abroad throughout the world, is delighted by Congresswoman’s Carolyn Maloney’s expression of support for the Tax Fairness for Americans Abroad Act and her introduction of legislation to provide a ” same country exclusion” for FATCA compliance and establish a Commission on Americans Living Abroad,” said AARO president Fred Einbinder. “These welcome initiatives will substantially reduce unnecessary burdens placed on Americans resident abroad and ensure that their interests are considered in future legislation. AARO takes this opportunity to express its gratitude to Congresswoman Maloney for her longstanding support for Americans abroad as evidenced by these initiatives and her chairing of the Americans Abroad Caucus.”

“As one the oldest and largest non-partisan organizations of American Women living overseas, FAWCO is pleased to have the continued support of Rep. Carolyn Maloney and the Congressional Americans Abroad Caucus,” said FAWCO U.S. Liaison Johanna Dishongh. “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.  Additionally, FAWCO supports a Congressional Commission to study the potential unintended consequences of American legislation on those citizens living overseas in order to prevent them in the future.”

Background:

The Overseas Americans Financial Access Act directs the Internal Revenue Service (IRS) to exclude from Foreign Account Tax Compliance Act (FATCA) reporting financial accounts held by American citizens in countries where they are bona fide residents. This bill eliminates the unintended and excessive reporting burden imposed on overseas Americans by FATCA, enabling them to more easily open and maintain private bank accounts with foreign financial institutions (FFI’s).

The Commission on Americans Living Abroad Act of 2019 creates an Executive Commission comprised of a 10-member bipartisan panel to examine the concerns of U.S. citizens living and working abroad. The Commission would analyze, report on, and make appropriate recommendations to address the effects of activities, laws, and policies of the federal government on Americans citizens living overseas.

1 Comment

  1. “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.”

    The introduction of these two pieces of proposed legislation is generally good news. As always, the “devil will be in the details” (assuming that it gets support). It will also be interesting to see who benefits from this legislation. A huge (largely unacknowledged) problem is the number of “accidental Americans” who have had their banking access compromised by FATCA.

    The only real solution to these problems is for the United States to end it’s antiquated and unjustified system of “citizenship-based taxation”. The need for Representative Maloney’s legislation exists primarily because of this U.S. policy – which should be more accurately described as:

    The United States imposing worldwide taxation, according to U.S. tax rules, on individuals who are tax residents of other countries and do NOT live in the United States!

    This must end.

    In addition to introducing this legislation, I invite Rep Maloney to actively and publicly support Representative Holding’s “Tax Fairness For Americans Abroad” bill which would go a long way toward ending the problems. As it currently stands, Americans are no longer free to emigrate from the United States and participate fully in the life of other countries. Land of the free? Citizenship-based taxation keeps…

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