American expats urged to comment on State Dept fee reduction plan by 1st Nov deadline

October 29, 2023 By Helen BurggrafAmerican Expat Financial News Journal

Advocates for fairer tax treatment of American expats by their government, including both the Republicans Overseas and Democrats Abroad, are urging such expats not to hesitate in posting comments on a U.S. State Department proposal to lower the fee currently charged those seeking to renounce their U.S. citizenships, the deadline for which expires in less than three days. 

However, many of those urging fellow expats to register their opinions regarding the renunciation fee, including both the Democrats Abroad (DA) and the Republicans Overseas, are suggesting that those commenting include a mention of the fact that there would be less need for people to renounce their citizenships if the U.S. government were to address the mostly tax-related problems that are driving them to do so.

The reason they’re ramping up their calls for expat action now is because they say this temporary comment submission facility represents a rare chance for expats to speak directly to strategists at one of the most important bureaus involved in U.S. tax policy decision-making – and because, as this article was being published on Sunday (Oct. 29), only 454 comments had been received, according to the page on the Federal Register that those invited to make comments are instructed to visit.

“Instead of penalizing Americans on their way out the door, the State Department should be asking itself why they’re leaving in the first place,” is how the DA Taxation Task Force (DATTF) put it, in an email to its members earlier this month. It reinforced this message with a follow-up email on Thursday.

While reducing the fee to renounce – or, as the State Department puts it, the fee for providing the necessary consular services required to process requests for each “Certificate of Loss of Nationality” or CLN) – to US$450 from US$2,350 was “at least an improvement” to the current situation, the DATTF went on, “the real tragedy is that so many Americans feel like they have to cut ties in the first place.

“Instead of nickel-and-diming Americans forced to renounce their citizenship to escape double-taxation, the State Department should push Congress to bring the US into line with the entire rest of the world in the way it taxes its expats.”

Thursday’s email added: “This is a great opportunity for your voice to be heard about the tax problems forcing Americans abroad to renounce their citizenship in the first place (aka the tax compliance nightmare suffered by Americans abroad).”

The Republicans Overseas echoed the Dems Abroad’s comments in its own message to its members, sent a few days ago, in stressing the opportunity to make the case for fixing the way American expats are taxed, rather than focusing on the renunciation fee itself.

“The fee reduction for renouncing American citizenship is a welcome step, but we should really be trying to reduce the onerous taxation and regulatory burdens that are driving overseas Americans to renounce their citizenship in the first place,” the Republicans Overseas’s message noted.
“The fee reduction for renouncing American citizenship is a welcome step, but we should really be trying to reduce the onerous taxation and regulatory burdens that are driving overseas Americans to renounce their citizenship in the first place,” the Republicans Overseas’s message noted.

“We urge the State Department to support overseas Americans by making Congress aware that the United States is an outlier in its practice of citizenship-based taxation, and that moving to residence-based taxation would decrease the number of citizenship renunciations.”

Similar comments from other organizations and individual expats echoed these points – with all stressing the importance of getting as many comments submitted to the State Department as possible, from expats around the world, by “11/01/2023 at 11:59 pm EDT”.

And “the more personal your comment is the better!” the DA Global Taxation Task Force message pointed out.

John Richardson, a Toronto-based lawyer who has been helping American expatriates with their renunciations for the past decade, is among those who think the State Department “needs to understand that people are not renouncing because they want to, but because they have no other option.”

Especially those Americans who don’t plan to return to the U.S., for example, because they’ve retired abroad, or married a non-American and built a life overseas, lose patience, he says, with “the toxic combination of extra-territorial taxes and other burdens that the U.S. imposes on them.

“As they begin to realize the investment and savings opportunities that their relatives back home in the United States, and their neighbors and friends in their country of residence, enjoy that they cannot, simply because of their citizenship, they begin to see renunciation as their only option – and the fee they’re required to pay as an additional insult to their injury.”

Accidentals: ‘The fee…remains excessive’

One organization with a slightly different take was the Association of Accidental Americans. Today it emailed its more than 1,400 members for the second time since Oct. 16 to urge them to tell the State Department that, for so-called “accidental” Americans who have “never lived, studied, worked, or voted in the United States,” yet who have no choice but to renounce to avoid the “significant burden” U.S. citizenship is causing them, “the fee of US$450… remains excessive.”

The AAA has been an active crusader against the fee for processing expatriating Americans’ CLNs (Certificates of Loss of Nationality) since the organization was founded in 2017, often pointing out that until FATCA was signed into law in 2010, U.S. citizens weren’t charged anything at all to give up their citizenship. Then, beginning in 2010, it was set at US$450, and raised to US$2,350 in 2014.

Congressman Beyer: hint of role of FATCA in expat divorces

Rep. Don Beyer

In a separate but related matter, US expats around the world have been tuning in to an hour-long YouTube recording of what some have described as a fascinating online interview the other day of U.S. congressman Don Beyer, a senior Democratic member of the House of Representatives who spent four years as the U.S. ambassador to Switzerland and Liechtenstein, ending in 2014.

The reason DATTF chair Rebecca Lammers sought to interview Rep. Beyer (pictured) was because he, along with fellow Democratic Rep. Dina Titus of Nevada, recently introduced a bill aimed at fixing at least some of the problems currently being faced by US expats (known as the Tax Simplification for Americans Abroad Act of 2023 (H.R.5432)).

Reps Beyer and Titus have emerged over the past year or so as the loudest voices in Congress currently speaking out on behalf of American expats.
Their bill was introduced on Sept. 13, just a few weeks more than a year ahead of the 2024 U.S. presidential election.
Among the comments made by Beyer during the interview that seemed to catch many American expats’ attention – at least to judge by their social media postings – was an observation that “at least anecdotally” he felt that FATCA had played a role in some expat divorces in Switzerland, as certain non-American spouses lost patience with the U.S. government’s interference in their partner’s financial affairs.

Said one American expat afterwards, on X, formerly known as Twitter: “I have told people in the past [that] breaking up marriages is just another among the litany of disasters caused by US taxation exceptionalism and have been laughed at, [but] here [it] is from a congressman.”

Beyer said he, like many American expats today, had a bank account closed by a bank "the moment I left the country" (to move to Switzerland, when he became ambassador), although he said the problem was the "complexity" of the regulations and not their existence, which he said was "justifiable" in the cause of curbing tax evasion by high-income citizens living at home or overseas.
During the interview, Rep. Beyer repeatedly agreed with Lammers’s examples of problems with the way U.S. expats are taxed, and otherwise handled, by their government, while at the same time, explaining the difficulties he, Rep. Titus and others in Washington faced in their efforts to improve things.
Editor’s note: Those interested in contributing their thoughts to the State Department’s forum on the question of its proposed renunciation fee reduction may click here, and follow the instructions.

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