Our Work

Our Research

 

Research in support of Residence-based taxation.

The United States taxes on the basis of citizenship. This means it taxes American citizens on their worldwide income regardless where they live. An American citizen living in London, or Toronto, or Tokyo, or Johannesburg, generally must file U.S. tax returns and pay U.S. tax, even if he or she does not live in or travel to the U.S. Taxation is not based on any physical presence test. The source of the income makes no difference either: income exclusively earned and additionally taxed abroad is also subject to U.S. reporting. Moreover, Americans abroad are commonly taxed twice, for example on some types of investment income and certain retirement-savings vehicles. In some cases, where an individual was born in the U.S. to foreign parents on a student or temporary work visa who then returned to their home country, are also subject to US taxation on their foreign-earned income.

The worldwide norm is to tax citizens based on their residence and where their income is earned. This is the concept of Residence-Based Taxation (RBT). ACA’s RBT approach calls for separating foreign-source and US-source income and excluding from US taxation specified foreign-source income earned when a US citizen is a qualified resident abroad. Under RBT an individual is taxable on US-source income only and not on foreign-source income due to the US citizen being officially resident outside of the United States. 

ACAGF fielded two research projects in support of tax reform for U.S. citizens overseas. ACAGF contracted with District Economics Group (DEG) a Washington, D.C. based consultancy, first in 2017 for the original study and then again in 2022 for an update to the study.  ACAGF's research was done in support for adopting Residence-based taxation (RBT).  ACA developed a tax policy comparative showing where in the current tax code you need to change tax policy to adopt RBT.  ACAGF research took those changes and put a number on the cost for adopting RBT.  The key findings for these research studies support that adoption of Residence-based taxation can be achieved and not cost the US Treasury in revenue and be tight against abuse.

This research is important because the U.S. Congress lacks complete data on the community of U.S. citizens living and working overseas and we knew that any tax reform proposal would need good numbers to back it up. There is no official government count of U.S. citizens living overseas so there is no accurate number on how many U.S. citizens overseas should be filing. The US State Department no longer makes an official count of US citizens and previous counts utilized imperfect methodology because U.S. citizens are not required to register with the US government when they move overseas.

The U.S. Treasury and the Internal Revenue Service (IRS) do not have a complete picture of the income and asset make up, size and tax compliance behavior of U.S. citizens overseas. The IRS and U.S. Treasury may have some numbers on tax filings from overseas but without knowing how many U.S. citizens overseas should be filing their numbers are lacking. ACAGF’s research gives these offices and the Congress the data and research it needs to complement the US Treasury and IRS government data.

Offices that are involved in tax reform and drafting legislation and regulations count on hard data and research, reliable numbers and statistics. ACAGF research gives these offices that quality of information. Survey data on the behavior and feelings of US citizens overseas is important to the conversation but does not assist legislators when they need to run numbers (score) how a change in legislation will affect the government budget. That is why ACAGF’s research is so important, unique and valuable. No other organization has provided Congress and the Administration with this level of research specifically on the community of US citizens overseas and on Residence-based taxation (RBT).

 

Study on the impacts of tax legislation on U.S. citizens overseas

In 2015 ACAGF in conjunction with the University of Nevada, Reno conducted a study on the impacts of tax legislation on U.S. citizens overseas. Key findings from the study indicated that:

  • Seventy-eight percent (78) of respondents felt having to comply with U.S. tax law puts them at a professional disadvantage compared to others working in their country of residence

  • Eighty-six percent (86) of respondents said that FATCA needs to be reworked to allow Americans overseas access to banking services and include a “Same Country exemption” provision (i.e., no reporting requirement for accounts held in the same country of residence)

  • Overseas Americans generally felt the IRS was not keeping them informed about how to comply with evolving tax law

 

Survey on opinions of U.S. citizens overseas

ACAGF in conjunction with Greenback Expat Tax Services also conducted this survey in 2015 with over 1,800 US expats to gather the opinions of overseas Americans on the issues that impact them most. One clear message the data reflected was the growing frustration with US tax laws, such as Foreign Account Tax Compliance Act (FATCA), a major US initiative to uncover US taxpayers hiding money overseas to avoid paying American taxes.

 

Our Education: Government and the Community

 

Webinars explaining ACAGF’s research work with DEG

After fielding our research studies with District Economics Group (DEG) - see above, ACAGF hosted a series of webinars for both the U.S. Congress and the Community to explain how the research was conducted and how Residence-based taxation (RBT) can pass into law.

 

Webinar explaining Congressman Holding’s Tax Fairness for Americans Abroad Legislation

In 2019 American Citizens Abroad (ACA) and American Citizens Abroad Global Foundation (ACAGF) hosted two webinars updating the community on the Congressman Holding’s legislation, Tax Fairness for Americans Abroad Act (TFAA). Introduced on December 20, 2018 by Representative Holding (R-NC), TFAA (H.R. 7358) would have changed the approach to taxing US citizens living and working overseas to a residency-based taxation—some call it territorial-- approach.  U.S. citizens overseas would no longer be taxed on income that is not earned in the United States.  The webinar explained the contours of the legislation and discussed strategies for advancing the legislation in Congress.

 

Conference on Residence-based taxation (RBT) versus Citizenship-based taxation (CBT)

ACAGF held a conference in Toronto, Canada where academics discussed the values of RBT versus CBT “21st Century Taxation of Americans Abroad: Citizenship-based taxation vs. Residence-based taxation.” The conference was held on Friday, May 2, 2014 in Toronto, Canada at St Michael’s College where tax, law, banking and finance professionals debated the tax treatment of overseas Americans. 

Professor Michael Kirsch of Notre Dame University defended citizenship-based taxation (CBT) and Dr. Bernard Schneider, Teaching Fellow at Queen Mary University of London School of Law, recommended residence-based taxation (RBT). Professor Kirsch highlighted the community aspects of American citizenship as a basis for taxation whereas Dr. Schneider focused on the need for the law to adapt to the composition of Americans abroad and the realities faced by long-term overseas residents

2024 Webinars and Events

  • February, 2024 webinar “Possible Legislative Remedies for U.S. Taxation of Expats hosted by US Expat Conference

  • January, 2024 webinar ACA and ACAGF Advocacy and Education Efforts hosted by The American International Club of Geneva (AIC)

2023 Webinar and Events

  • September, 2023 Town Hall Evening Zurich, ACA’s efforts in Washington, DC / Tax, Estate & Financial Planning for US Taxpayers living in Switzerland

  • September, 2023 Town Hall Evening Lausanne , ACA’s efforts in Washington, DC / Tax, Estate & Financial Planning for US Taxpayers living in Switzerland

  • February, 2023 Marylouise Serrato, ACA's Executive Director, talked on “The Value of US Citizenship in 2023 for Expats” and provided a summary of ACA's work helping address some of the challenges that expats face.

2021 Webinars and Events

2020 Webinars and Events

2019 Webinars and Events

2018 Webinars and Events

2017 Webinars and Events

2016 Webinars and Events

2015 Webinars and Events