Tag Archives: FBAR

Part 1: The University Of Washington “Low Income Tax Clinic” And A Canadian Student

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Prologue

This is the first of two blog posts (Part 1 and Part 2) that discuss the University of Washington Low Income Tax Clinic report referencing a dual Canada/U.S. citizen student living and working in Canada.

Part 1 (this) will discuss the report generally and how the circumstances actually trigger the Canada/U.S. tax treaty. Think of it! A few thousand dollars of summer income received by a Canadian student implicates an international tax treaty. Only in America!

Interestingly, the specific factual circumstances include an example of what happens when a U.S. citizen living outside the United States receives a U.S. inheritance that generates U.S. source income. This is a concern for many Americans abroad. It is a complicated area.

Mostly Part 1 will discuss the “LITC” Report. Specifically how the “LITC” viewed the issue. How they incorrectly tried to apply the U.S. Canada tax treaty (apparently) without regard to the “saving clause” which is included in all U.S. tax treaties.

The report seems to say that the taxpayer filed a U.S. tax return for the 2021 tax year and filed to include income which (because of information reporting) the IRS was aware of. This should be of concern to Americans abroad generally. I will discuss this aspect more fully in Part 2.

Part 2 will discuss the specific problem of a U.S. citizen abroad inheriting (or anticipating inheriting) U.S. assets (whether income producing or not). I am making this a separate post because it is a complicated topic. The most rational response to this situation is highly dependent on your factual situation.

Part 2: Inheriting From America AKA Anxiety On Steroids – Retain Or Renounce U.S. Citizenship? What About U.S. Tax Compliance?

In any case, we begin with Part 1 …
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IRS Ends “Delinquent FBAR Submission Procedures” Leaving No “Guaranteed Penalty Free Option”

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Introduction

Podcast 1 – July 2, 2026

Podcast 2 – July 17, 2026

On June 26, 2026 I did a presentation in London, UK titled “The Life And Times Of Mr. FBAR”. Obviously, the presentation included a discussion of how to file delinquent FBARs without triggering an FBAR penalty.

That discussion included references to both:

– “Streamlined filing procedures“; and

– “Delinquent FBAR submission procedures”

On June 30, 2026 the “Delinquent FBAR submission procedures” option was removed from the IRS site. It appears that this specific procedure is no longer an option. Notably, the “Delinquent FBAR submission procedures” option included the promise that:

The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.

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December 2011 – IRS FS-2011-13: Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.

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Purpose

The purpose of this post is to archive the 2011 IRS Fact Sheet for U.S. Citizens or Dual Citizens Living Outside the U.S.

The summer of 2011 was a particularly difficult time for U.S. citizens living outside the United States. Many of them were learning about U.S. citizenship taxation and FBAR for the first time. Many made the mistake of entering the IRS 2011 Offshore Voluntary Disclosure Program (“OVDI”).

Finally, in December of 2011 the IRS provided minimal direction on what Americans abroad were required to do.

I am in the middle of preparing a presentation on “The Life And Times Of Mr. FBAR” and have been considering “civil” FBAR penalties under 31 U.S.C. 5321. Specifically, what are the factors that the IRS considers in determing whether an FBAR violation is willful or non-willful. I remember this 2011 directive as including some interesting considerations. It taok me some time to track this down. Hence, I though I would write a short post to ensure that:

“Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
FS-2011-13, December 2011”

was stored on this site. Hence, this post.

Of particular interest are the following paragraphs:

“6. Possible penalties for failure to file FBAR

If you fail to file an FBAR, in the absence of reasonable cause, you may be subject to either a willful or non-willful civil penalty. Generally, the civil penalty for willfully failing to file an FBAR can be up to the greater of $100,000 or 50 percent of the total balance of the foreign account at the time of the violation. See 31 U.S.C. §5321(a)(5). Note that this penalty is applicable only in cases in which there is willful intent to avoid filing. Non-
willful violations that the IRS determines are not due to reasonable cause are subject to a penalty of up to $10,000 per violation. There is no penalty in the case of a violation that IRS determines was due to reasonable cause. For more information about the FBAR penalty, see Form TD F 90-22.1. For information about the reasonable cause exception to the FBAR penalty, see IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR).

Example 3: Same facts as Example 1, except that the highest balance in Taxpayer’s checking account exceeded $10,000 and, after reading recent press and thus learning of his FBAR filing obligations, Taxpayer filed an accurate, though late, FBAR. The FBAR was accompanied by a written statement explaining why Taxpayer believed the failure to file the FBAR was due to reasonable cause. The IRS will determine whether the violation was due to reasonable cause based on all the facts and circumstances. Taxpayer’s explanation for why he failed to timely file an FBAR appears reasonable in view of the facts and circumstances of the case. Since
the IRS determined that the FBAR violation was due to reasonable cause, no FBAR penalty will be asserted.

Factors that might weigh in favor of a determination that an FBAR violation was due to reasonable cause include reliance upon the advice of a professional tax advisor who was informed of the existence of the foreign financial account, that the unreported account was established for a legitimate purpose and there were no indications of efforts taken to intentionally conceal the reporting of income or assets, and that there was no tax
deficiency (or there was a tax deficiency but the amount was de minimis) related to the unreported foreign account. There may be factors in addition to those listed that weigh in favor of a determination that a violation was due to reasonable cause. No single factor is determinative.

Factors that might weigh against a determination that an FBAR violation was due to reasonable cause include whether the taxpayer’s background and education indicate that he should have known of the FBAR reporting requirements, whether there was a tax deficiency related to the unreported foreign account, and whether the taxpayer failed to disclose the existence of the account to the person preparing his tax return. As with factors that might weigh in favor of a determination that an FBAR violation was due to reasonable cause, there may be other factors that weigh against a determination that a violation was due to reasonable cause. No single factor is determinative.

Current IRS procedures state that an examiner may determine that the facts and circumstances of a particular case do not justify asserting a penalty and that instead an examiner should issue a warning letter. See IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR). The IRS has established penalty mitigation guidelines, but examiners may determine that a penalty is not appropriate or that a lesser (or greater) penalty amount than the guidelines would otherwise provide is appropriate. Examiners are instructed to consider whether compliance objectives would be achieved by issuance of a warning letter; whether the person whocommitted the violation had been previously issued a warning letter or has been assessed the FBAR penalty; the nature of the violation and the amounts involved; and the cooperation of the taxpayer during the examination.

Example 4: Taxpayer is a United States citizen who lives and works in Country B as a computer programmer. Taxpayer has checking and savings accounts with a bank that is located in the city where he lives. The aggregate balance of the checking and savings accounts is $50,000 during the tax year. Taxpayer complied with Country B’s tax laws and properly reported all his income on Country B tax returns. Taxpayer failed to file federal income tax returns and failed to file FBARs to report his financial interest in the checking and savings accounts. After reading recent press and thus learning of his federal income tax return and FBAR reporting obligations, Taxpayer filed delinquent FBARs, reporting both foreign accounts, and attached statements to the FBARs explaining that he was previously unaware of his obligation to report the accounts on an FBAR. Taxpayer also filed federal income tax returns properly reporting all income and no tax was due. The IRS will determine whether the FBAR violation was due to reasonable cause based on all the facts and circumstances. Taxpayer had a legitimate purpose for maintaining the foreign accounts, there were no indications of efforts taken to intentionally conceal the reporting of income or assets, and no tax was due. Taxpayer’s explanation for why he failed to timely file an FBAR appears reasonable in view of the facts and circumstances of the case.

Since the IRS determined that the FBAR violation was due to reasonable cause, no FBAR penalty will be asserted.”

You can read the FS-2011-13 in its entirety here:

FS-2011-13

It is also discussed here.

John Richardson – Follow me on X.com/Expatriationlaw

AARO To File Amicus Brief To Support Argument That FBAR Penalties May Violate 8th Amendment Prohibition On Excessive Fines

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The AARO brief is for the benefit of ALL Americans abroad. Please support AARO by completing their survey!

Call for Member Input – FBAR Case (Amicus Brief)

AARO to file an amicus brief with the 9th Circuit Court

AARO is working with a major U.S. law firm on an amicus brief (“friend of the court” brief), which it plans to file in May 2026, in the case United States of America v. Tuncay Saydam. Mr. Saydam was assessed penalties, now exceeding $500,000 with interest, for not having filed FBAR reports during the years 2013-2017 for his overseas bank accounts. Our amicus brief will support Mr. Saydam’s argument that these penalties are unconstitutional under the 8th Amendment to the U.S. Constitution, which prohibits the imposition of excessive fines.

Your answers to the questions below will help AARO describe in our amicus brief the difficulty for ordinary Americans to navigate the complexity and burden of compliance with the FBAR and other financial reporting requirements.

Here is the link:

https://aaro.org/issues/fbar/call-for-member-input-fbar-case-amicus-brief

John Richardson – Follow me on X.com/ExpatriationLaw

“13 Reasons Why” I Committed Citizide By Renouncing US Citizenship By Jane Doe

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13 Reasons Why I Committed Citizide

Note: The following brilliant essay was written by a former client of mine. I originally posted it in 2017 on Medium here. My introductory comments in 2017 are (I think) worth considering. If you want help with deciding whether to renounce U.S. citizenship feel free to reach out.

(Inspired by the television series, 13 Reasons Why)

Hey, it’s Jane. Jane Doe. Settle in because I’m about to tell you the story of my renunciation. More specifically, why I gave up my US citizenship. And if you’re reading this article, you’re probably thinking of doing it too. I can’t expect you to understand exactly how I feel; each person has a unique set of circumstances, a deeply personal mix of conflicting emotions, fears and problems that shape their response. But I can tell you why I did it. Let me start by saying, don’t believe everything you hear.

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From The OVDI Trauma Of 2011 To The Continuing Trauma Of U.S. Citizenship Abroad Today

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Prologue – August 2011

Today is August 26, 2025. This coming weekend is Labour Day weekend. It was almost 14 years ago to the day that many U.S. citizens (and some former citizens) in Canada and around the world were being pressured to enter into the 2011 OVDI (“Offshore Voluntary Disclosure Initiative”). Those who entered that program, offered a substantial percentage of their wealth to the IRS, to avoid punishment. The punishment would have been for the failure to comploy with laws they had no way of knowing existed. Shockingly, many who entered the OVDI program agreed to penalties that were completely disproportionate to their noncompliance. Interestingly, many who (1) entered the program and (2) used the opt out provision paid little or no penalties.

The OVDI program was predicated on the generation of penalty threats from the IRS and the tax advisers delivering those threats to the individuals impacted. The nature of the threats evolved. Toward the deadline for entering OVDI the IRS offered increased penalty to nonresidents who didn’t know they were U.S. citizens. As noted by Robert Wood on August 11, 2011 writing in Forbes, the IRS agreed that individuals who didn’t know they were U.S. citizens would pay a reduced rate of 5% for the privilege of participating in the OVDI program. Mr. Wood describes this special concession to those who didn’t know they were U.S. citizens as follows:

You are invited to read the complete post on the Isaac Brock Society here.

From The OVDI Trauma Of 2011 To The Continuing Trauma Of U.S. Citizenship Abroad Today

John Richardson – Follow me on X.com @Expatriationlaw

Sacred Trust: Counseling Americans Abroad Through The Trauma Of A FATCA World

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Introduction:

Much of living as a U.S. citizen abroad is learning to cope with a life of trauma. Posts discussing the trauma are here here, here and here. For Americans abroad, preparing to file a U.S. tax return is a form of trauma.


The U.S. extra-territorial tax, form and penalty regime reminds Americans that they are:

“Subject to certain penalties, for uncertain conduct!

Those who do not file tax returns worry about the consequences of not filing.

Those who do file tax returns worry about the consequences of filing.

Thinking about the issue of trauma, I was reminded of a presentation that I did in 2015 in London, UK. It was titled:

Sacred Trust: Counselling Clients Through The Trauma Of “U.S. Citizenship Abroad” In A FATCAesque World”

(The audience was a group of U.S. tax professionals. I am not sure that they really understood the message. But, the presentation was a welcome diversion from the usual technical tax talk.)

I had forgotten about the presentation, but was reminded of it today. Looking at the slides, I think I agree with everything I said in 2015. If anything, it has gotten worse!

Here is the presentation:

A PDF version is here:

Sacred Trust – Counselling Clients Through the “Trauma of U.S. Citizenship Abroad” in a FATCAesque world – Toronto – February 2015 1

AI Generated Podcast generated from the 2015 presentation

John Richardson – Follow me on X.com @ExpatriationLaw

U.S. Citizens In Canada And Abroad: The Trauma Of Organizing Information For Your U.S. Tax Return

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Prologue

As an older post I wrote confirms, Americans abroad are subject to special provisions and those special provisions include a number of information returns!

Forms required by #Americansabroad 101 – The Explanation

My reason for writing and the purpose of this post

I am not a tax preparer. I am an expatriation lawyer. In this.capacity, I either:

– see U.S.tax returns prepared by a tax preparer; or

– discuss the necessity of U.S. tax compliance when a person wishes to become U.S. compliant through either the IRS streamlined or the IRS Relief Procedures Programs.

Americans abroad have many reasons for wishing to be U.S. tax compliant. In many cases it is associated with expatriation. In some cases it is part of estate planning (in many cases it is better to die without being a U.S. citizen). In. some cases it is to renounce and NOT create barriers to inheritance for U.S. citizen children. In some cases it is because they are likely to inherit U.S. income producing assets. In some cases it is because they fear noncompliance. In some cases (regardless of fears of penalties) they believe in. compliance with the law. The point is that U.S. tax compliance (it’s a huge industry) is an important part of people’s lives.

Regardless of one’s view of the U.S. citizenship tax regime, there are large numbers of Americans abroad who either attempt to meet their annual filing obligations or who desire to meet those obligations.

In this context I offer two important (I think) thoughts:

First, forms and tax returns are dangerous things and should be filed correctly. If you are going to file, you might as well do it correctly.

Second (and more importantly), for U.S. citizens abroad the filing of U.S. tax returns is a major cause of significant trauma in their lives. It is NOT a question of filing a. 1040 that just reports “foreign income”. It is, because of the large number of penalty-laden information returns, an accusation that is based on a presumption of “wrong doing”. (U.S. residents and their tax preparers who think this is hyperbole, just try living as a tax compliant American abroad!)

Therefore, the tax compliance question for Americans abroad is a question of how do they mange their trauma. The issue is how do they manage the tax filing issue in a way that minimizes the associated trauma. Are they likely to be audited? I don’t think so. Are they likely to think about the possibility of audit and penalties? Yes, many of them do. Furthermore, learning about previous filing mistakes is – for many people -incredibly traumatic.

The purpose of this post is to help with the management of trauma.

______________________________________________________________________

The Organization Problem – How to read this post …

Identifying the information that is needed.

I have noticed that Americans abroad have difficulty organizing their information. Remember, tax preparers are not mind readers. They know very little about you. The simply process the information you provide. Sure, they have questionnaires (with varying degrees of detail). That said, I think it would be helpful to provide an overview of what it means to file a U.S. tax return, what information is relevant and how to think about retrieving that information. Those of you who wish to renounce U.S. citizenship will want to be in a position where you can certify five years of U.S. tax compliance.

I have written this post primarily from a Canadian perspective (I live in Toronto, Canada.) Although the information is generally applicable to all U.S. citizens living outside the United States, some of the information is specific ONLY to Canada. So, please don’t be lazy. Get informed! Stay informed!

While providing an overview, the information in this post cannot be complete. It is written for the average person, with a simple life and mainstream investments that are easily understood and characterized.

Finally, if you are filing U.S. taxes abroad for the first time, I suggest you should start with the following simple question:

“What would my U.S. tax tax return contain in terms of forms, schedules, etc.?”

In any case, I am writing this post because …

Yesterday I compared the U.S. tax return and the Canadian tax return of a U.S. citizen living in Canada. The Canadian return was 14 pages. The U.S. return was 59 pages. The person had a very simple life (retired and living off the usual pensions). He did NOT owe any U.S. taxes. That said, he was NOT compliant with his U.S. tax filing obligations. The reason was that his “foreign assets” were not reported properly on Form 8938. I suspect that this person had no idea how to properly identify and organize the foreign financial asset information to properly transmit it to his U.S. tax preparer. This is perfectly understandable. Assuming no Canadian Controlled Private Corporation (a presumptive instrument of tax evasion from a U.S. perspective), or other controlled foreign corporation, most tax filers will be required to file:

– FinCEN 114 AKA FBAR

– Form 8938

– Possibly Forms 3520 and 3520A (make sure that you really are dealing with a Trust or have received a foreign gift)

– and possibly more

This post is to provide very simple advice on how to organize this information to provide to your tax preparer.

U.S. tax filings are more about the disclosure of information than about the calculation of tax

Generally, you can assume that ANY and ALL financial accounts and financial assets (brokerage accounts, pensions, individual shares in non-U.S. corporations) must be reported. The reporting issue is distinct from the tax issue.

Foreign real estate owned directly by Americans abroad is NOT (at present) subject to separate reporting (although income earned from them is taxable).

Preparation for the filing of a U.S. tax return should be viewed as four categories of. tasks:

Category A – Identifying The Relevant Information

Category B – Deciding How That Information – In Terms Of The Relevant Forms – Is To Be Reported

Category C – Reporting The Information On The Relevant Forms

Category D – Deciding Whether Any Information Returns Must Be Filed Even If A Tax Return Is Not Required (For example: Form 5471, 8621 and Form 3520 and Form 3520A may have a filing requirement even if a 1040 is not required!)

Category E – Does Your Country Of Residence Have Rules Requiring The Reporting Of Foreign Assets (similar to FBAR, Form 8938, etc.)?

Be careful!!

Canada (and other countries) have very strict rules governing the reporting of foreign assets.

Once these three tasks have been. completed, one is ready to place the income on the actual tax return (1040 or 1040NR) and Schedules.

What follows are the ten steps that should prepare you to give your information to your tax preparer.

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Part 2: The Hurd Bill – H.R. 4501 Does NOT Protect Pope Leo From FBAR (And FATCA) Reporting

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Part A – Purpose and Summary:

This is my second post on H.R. 4501. My first post was a general introduction and is here:

Colorado Congressman Jeff Hurd Recognizes Problems Of U.S. Citizenship Taxation

The purpose of this post is to argue that H.R.4501 does NOT protect U.S. citizen Pope Leo from the invasive reporting obligations which are at the heart of what it means to be a U.S. citizen. The Catholic Church may rue the day that it elected a U.S. citizen as pope.

To put it simply:

H.R.4501 exempts Pope Leo from Subtitle A of the Internal Revenue Code (the income tax). It does not:

1. Exempt him from Subtitle F – specifically Chapter 61 – which is where the penalty-laden information reporting requirements are found; and

2. It does not exempt him from section 5314 of 31 U.S.C. which is where the FBAR requirements are found.

For H.R. 4501 to achieve the tax and reporting related aspects of its legislative purpose it must:

– either exempt him from Subtitle F in addition to exempting him from Subtitle A or exempt him entirely from Title 26 (The Internal Revenue Code); AND

– exempt him from 5314 of 31 U.S.C.

This post is organized as follows:

Part A – Purpose and Summary:
Part B – The Concerns Articulated By Representatives Of The Catholic Church And Others
Part C – Parsing H.R.4501 – why it does NOT achieve what it purports to achieve:
Part D- An X.com thread discussing this issue …

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My Submission To Senate Finance: Discussion Draft – Taxpayer Assistance and Service Act

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Introduction and purpose

On January 30, 2025, The Senate Finance Committee released a proposed a Discussion Draft of the “Taxpayer Assistance And Service Act”

The text of the bill is here:

https://www.finance.senate.gov/imo/media/doc/tax_admin_bill.pdf

The Committee’s commentary on the bill is here:

https://www.finance.senate.gov/imo/media/doc/tas_act_discussion_draft_section_by_section.pdf

The deadline for submissions is/was March 31, 2025. During the evening of March 31, 2025. I drafted this “quick and dirty” submission to make it clear that:

Americans abroad need citizenship-taxation abolished. They do not need improvements to and the retention of citizenship-taxation.

I am including this submission as a blog post so that I don’t forget that I wrote it.
_________________________________________________________________________
Submitted via email to “discussiondraft@finance.senate.gov”

March 31, 2025

Dear Senator Crapo:

Re: Discussion Draft of” Taxpayer Assistance and Service Act”

https://www.finance.senate.gov/imo/media/doc/tax_admin_bill.pdf

I write (briefly and quickly) to comment on the Draft “Taxpayer Assistance and Service Act”.

My comments are restricted to Sections 201 to 206 of the draft bill which purport to address the concerns of U.S. citizens living outside the United States. I emphasize that I am writing in my personal capacity and this letter is separate from the submission from “SEAT” (an organization of which I am part.) While fully supporting SEAT’s submission, upon further reflection, I believe that an additional and more direct submission would be prudent.
In summary, I believe that the draft bill fails to acknowledge, much less address, the injustices inflicted on Americans abroad by the U.S. extra-territorial tax system. The U.S. extra-territorial tax system is generally referred to as “citizenship taxation”. The term “citizenship taxation” obscures what it really is and suggests that it is consistent with the meaning of U.S. citizenship. (I use the terms “citizenship taxation” and “extra-territorial taxation” interchangeably.)

The draft bill is written in a way that assumes that the issue is in the difficulty of compliance. It neither acknowledges nor suggests that the problem is with the substance of citizenship taxation instead of the process of compliance. Because of the sole focus on compliance (while ignoring substance), I believe that the bill is actually dangerous to achieving the tax reform that is needed to achieve fairness, equality and justice for Americans abroad.

Making it easier to comply with a system that is inherently wrong and does not serve the interests of the United States or its citizens is no improvement at all!

I urge the Committee to view this as an opportunity to recognize and address the fundamental injustice of citizenship taxation and NOT simply find ways to make compliance with an unjust system easier. To be clear, citizenship taxation is a system where:

1. The United States imposes taxation on the non-U.S. source income of individuals who do NOT live in the United States. (Example an individual who lives in France is subject to U.S. taxation on his income earned/source in France or even any other non-U.S. country.)

2. The basis of the U.S. claimed right to tax non-U.S. source income is mostly because the individual was born in the United States (regardless of how long or whether that person actually lived in the United States ). Therefore, a person born in the United States who moved permanently from the United States at the age of 10, is somehow supposed to pay the United States tax on non-U.S. source income for the rest of his life? What about a U.S. citizen born outside the United States who never lived in the USA?

3. Citizenship taxation results in double taxation (taxation by two countries on the same income). This is because (1) the country of residence claims the right to tax that income because the person actually lives there AND (2) the U.S. claims the right to tax that same income because the person was born in the United States. (What could go wrong?)

4. The double taxation of Americans abroad is NOT eliminated in all cases by foreign tax credits or the foreign earned income exclusion (contrary to the nonsense that the tax compliance industry and academic community spew).

5. Like resident Americans, Americans abroad may not actually owe money to the IRS every year. But unlike, resident Americans, the compliance burden (the forms and special rules resulting from the non-U.S. source income and assets) for Americans abroad far exceeds that of resident Americans. (It is not uncommon for Americans abroad to pay thousands of dollars a year in tax compliance fees.)

6. As has been noted by the Taxpayer Advocate for many years, Americans abroad are subject to threats of enormous penalties which bear absolutely no relation to the noncompliance.

The cumulative effect of 1 – 6 is that U.S. citizens residing outside the United States suffer:

– extraordinary out of pocket compliance expenses (many pay thousands per year)

– Uncertainty over what the laws mean and how they apply to them

– tremendous anxiety related to fear of penalties (certain penalty for uncertainty conduct)

– the huge opportunity cost of not being to meet the financial planning responsibilities to themselves, their families and their country of residence (the cost is incalculable)

To add insult to injury, the compliance burden is so complex that it takes many Americans abroad months to meet their U.S. tax compliance obligations. For these reasons (coupled with the fear of penalties – the word “foreign” in the Internal Revenue Code is generally followed by the world “penalty”) more and more Americans abroad are renouncing their citizenship. They are NOT renouncing because they don’t want to be U.S. citizens. They are renouncing because of fear of penalties. They are renouncing because they find it impossible to comply with a nonsensical system that is, unique to America, reflects the worst of America and has rules that make compliance very difficult. How would you like to live “life in the penalty box”?


Americans abroad have been begging for relief for many years!

in 2015 the Senate Finance Committee asked for comments and in July of 2015 issued a report on International Tax Reform. On the last page of the report (if anybody got to the last page) appeared the following:

“ F. Overseas Americans
According to working group submissions, there are currently 7.6 million American citizens living outside of the United States. Of the 347 submissions made to the international working group, nearly three-quarters dealt with the international taxation of individuals, mainly focusing on citizenship-based taxation, the Foreign Account Tax Compliance Act (FATCA), and the Report of Foreign Bank and Financial Accounts (FBAR).

While the co-chairs were not able to produce a comprehensive plan to overhaul the taxation of individual Americans living overseas within the time-constraints placed on the working group, the co-chairs urge the Chairman and Ranking Member to carefully consider the concerns articulated in the submissions moving forward.”
Notice that suggestion to “carefully consider the concerns articulated in the submissions moving forward”!

You can read the full report here:

https://adcsovereignty.wordpress.com/wp-content/uploads/2015/07/the-international-tax-bipartisan-tax-working-group-report.pdf

https://theinternationaltaxbipartisantaxworkinggroupreport.tiiny.site/

And if you are interested in some of those submissions from individual Americans abroad you can find them here:
https://www.box.com/citizenshiptaxation

It’s now 2025 (time flies). Another decade has passed. The time has come to consider the problems of citizenship taxation in a “substantive sense”. The time has come to abolish citizenship taxation altogether. The draft bill under consideration perpetuates the injustice.

No! it’s NOT radical to consider ending citizenship taxation.

Senator Crapo, you are a Republican.

You are certainly aware that our Republican President Donald J. Trump pledged to end the “double taxation” of Americans abroad during his campaign.

You are certainly aware that Republican Congressman LaHood, in support of President Trump’s pledge to end the “double taxation” of Americans abroad, introduced a Bill to end the double taxation of Americans abroad (by allowing them to opt to be taxed as though they were nonresident aliens).

There is clear momentum toward ending citizenship taxation. Ending citizenship taxation means that U.S. citizens living outside the United States would be taxable by the United States on ONLY their U.S. source income. (By the way, this is NOT radical. This is the international standard. This is how the rest of the world operates.)
The Draft “Taxpayer Assistance and Service Act” does “not much” for Americans abroad. Yes, compliance with U.S. citizenship taxation is a problem. But, the real problem is the unjust system of citizenship taxation to begin with. You don’t solve a problem by alleviating the symptoms of the problem You solve the problem by – well, getting rid of the problem.

U.S. citizenship taxation is an issue for more than individuals living outside the United States. It’s an issue for America as a country. It’s an issue for U.S. corporations. As it stands, U.S. citizenship taxation:

– Provides disincentives for U.S. multinationals to hire U.S. citizens abroad

– Provides huge disincentives for U.S. entrepreneurs to create businesses abroad

– Even makes it difficult for Americans to even open bank accounts outside the United States

U.S. citizenship taxation does not serve the interests of America as a whole!

The time has come to bring the injustice of U.S. citizenship-based taxation to an end.

Q. How can ending U.S. citizenship taxation be achieved?

A. To change U.S. tax rules so that U.S. citizens abroad are taxed as though they are nonresident aliens (only on their U.S. source income)

Senator Crapo, I urge you to join with President Trump and Congressman LaHood to bring the U.S. practice of citizenship taxation to an end! It’s time for the U.S. to stop imposing U.S. taxation on the non-U.S. source income of nonresident citizens!

You will be on the right side of history! You will participate in ending a great injustice rather than playing a role in perpetuating that injustice!

John Richardson

Toronto, Canada

John Richardson – Follow me on X.com @ExpatriationLaw

____________________________________________________________________________

Appendix A:

A PDF version of the letter is here (feel free to share if you like:

Discussion Draft of Taxpayer Assistance and Service Act

Appendix B:

A post that I wrote announcing the 2015 Senate Finance Report is here:

https://adcsovereignty.wordpress.com/2015/07/08/cbtlawsuit-first-report-of-senate-finance-committee-brings-citizenship-taxation-lawsuit-one-step-closer/

Appendix C:

The 2015 Senate Finance Report is here:

https://adcsovereignty.wordpress.com/wp-content/uploads/2015/07/the-international-tax-bipartisan-tax-working-group-report.pdf

Appendix D:

John Richardson, et al additional submission to the Senate Finance Committee in 2014:

https://citizenshipsolutions.ca/2014/01/24/submission-to-the-senate-finance-committee-on-citizenship-based-taxation/

Submission to the Senate Finance Committee on Citizenship-based taxation