The Internal Revenue Service (IRS) got an earful in May 2016 and learned a lot about the community of US persons living abroad who are struggling with the complexity of the US tax system.
The American Citizens Abroad Inc., (ACA) a non-profit organization, presented testimony at the National Taxpayer Advocate Forum on May 17, alongside other community groups to educate the IRS, the public and the media on certain key topics involving overseas Americans. The topics included how the IRS Future State might impact these Americans and the considerations the agency should take into account to best serve this group's distinct needs. For those of you who may not know, the IRS Future State is a project proposing to use electronic and on-line services in order to simplify tax compliance and to better serve US taxpayers. You can read more about this IRS initiative here. While ACA acknowledged its belief that automation can help facilitate the filing process for Americans abroad, it emphasized that this alone is insufficient for this unique group of taxpayers who are faced with the most complex tax reporting and the greatest lack of competent tax resources. As ACA so aptly stated "for Americans overseas, the complexity of the US tax code grows exponentially…"
What I found most significant about ACA's testimony was how it so skillfully used this speaking opportunity to educate the IRS, the media, and all of its audiences about the overseas American taxpaying community in order to dispel certain misperceptions about US taxpayers abroad and to make their unparalleled needs clearly known. Rife among erroneous beliefs are that this community is extremely wealthy and inordinately cheating on US taxes.
I found that the topics discussed by the ACA involved the real (and in many cases, surreal) problems faced by many Americans abroad in being tax compliant. It was comforting for me to find that the discussion list mirrored many of the reasons included by my own clients in their Statements of Fact for the Streamlined Foreign Offshore Procedure to demonstrate that their tax noncompliance was not "willful". In many cases, when the facts do not clearly go in one direction, professionals will struggle for guidance in making the determination of "nonwillfulness". The ACA's testimony can assist not only the IRS in understanding the issues faced by this group, but can assist professionals in fully appreciating the unique situations faced by their overseas clients and in making their Statements of Fact more robust.
Let's take a look at some of the factors raised by ACA:
The ACA also mentioned that in order for the Future State to become a reality, tax payments need to be made in US dollars to the US Department of the Treasury; refunds must be remitted to a US bank account. The numerous Americans abroad lacking a US residence or mailing address faced an almost insurmountable challenge to open or maintain a US bank account. This all changed when ACA helped solve the problem earlier this year. Now, Americans abroad can open a US bank account quite simply even if they have absolutely no US presence.
Thanks to ACA for all of its hard work on behalf of overseas Americans! Your impact will be felt by millions with gratitude.Back to Articles Back to Virginia La Torre Jeker J.D.
The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.
Virginia La Torre Jeker J.D.
Virginia La Torre Jeker J.D., is based in Dubai. Virginia has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has over 30 years of experience specializing in the international aspects of US tax, including FATCA. She has been quoted in the New York Times and Newsweek, and is regularly quoted in many local news articles and publications."
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