News for Americans Abroad



Tax reform for Americans abroad

Disappointingly, the Tax Reform bill (HR1) just passed by Congress contained no changes in the basic rules for Americans abroad, who will continue to be taxed on a citizenship (CBT) rather than a residence basis, although it did include “territorial” tax rules for corporations – meaning corporations will not be taxed on foreign source income.

However, according to ACA (American Citizens Abroad) there are strong indications that Congress will soon return to the subject of tax law changes, to make corrections in what was done and to address issues that were postponed. ACA has recently highlighted some of the areas of the new law that adversely affect Americans overseas and there are champions in the House and Senate who want to see tax reform for Americans overseas enacted. ACA has called on Congress to hold hearings on the subject, arguing that it is time for Congress to review every aspect of tax reform for Americans overseas: the background, the workings of existing law, the numbers, the real-life stories.

ACA has shown that RBT is revenue neutral, tight against abuse, and makes no one worse off than they are now. It only helps, and it corrects a terrible anomaly whereby Americans living outside the US are treated in a way that no other country in the world, other than Eritrea, treats its citizens.

For ACA’s initial analysis of HR1 – “Tax reform bill and Americans abroad: What happened? What’s next?” – go to their website:

If you would like to support this important issue – write your Representatives in Congress, urging them to support RBT! There are several links on ACA’s website to help you to contact them. Go to: Testimonials as to how CBT taxation affects you are particularly effective.

And if you would like to support their efforts financially – maintaining an advocacy presence in Washington does not come cheap! – join ACA ($70/year) or donate to support their efforts to defend the rights of US citizens living and working abroad (


In a newsletter last year I wrote about the IRS’s intention, under legislation enacted in 2015, to revoke the passports of American citizens who had a seriously delinquent tax debit ($51,000), although the process of certifying tax debt to the State Department had not been implemented at that time.

On 16 January 2018 the IRS published a Notice explaining the workings of the new rules and an IRS News Release warned “IRS Urges Travelers Requiring Passports to Pay Their Back Taxes or Enter into Payment Agreements; People Owing $51,000 or More Covered”. The first steps are expected to begin on Monday, 22 January, and certification to the State Department will begin around 22 February. Note that such certification will only apply to individuals who have already been served with a demand and penalties from the IRS.
For more information and an Alert by ACA’s Legal Counsel, go to the ACA website:

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