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U.S. Citizens Overseas Need Easier Program For Tax Compliance, Group Tells Government

Tuesday, August 6, 2013

The United States should provide U.S. citizens living overseas with a new, easier program to pay their taxes as noncompliance among this population grows, American Citizens Abroad told the government.

The current streamlined tax procedures for these citizens are too restrictive and uncertain, while a program for disclosing offshore assets imposes penalties that are too harsh, ACA said in a letter to the Internal Revenue Service and the Treasury Department released July 30 under provisions of the Freedom of Information Act (147 DTR G-1, 7/31/13).

The group urged the creation of a “Comprehensive Compliance Program” specifically for Americans abroad. It said the voluntary asset disclosure initiative should only be for U.S. citizens living in America.

ACA said there is “an ever-widening gap” between the reporting and compliance burden placed on the overseas American community and the “bleak statistics reflecting the very low effective compliance rate” among this population.

“This compliance gap is rooted not in dishonesty or malfeasance, but rather in practical difficulties and inherent inequities many U.S. persons would face in attempting to put their tax affairs in order,” ACA said in a July 19 letter.

The group said the U.S. government should create a program available to all nonresident taxpayers who have lived abroad for three years or more, and who meet one or more of four conditions:


  • have not filed tax returns and Forms TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR);

  • have filed incomplete or complete tax returns but have not filed an FBAR or have filed an incomplete FBAR;

  • have filed FBARs, but not tax returns; or

  • do not need to file a tax return because total income is below the threshold for reporting, but meet the FBAR filing requirement and have not filed an FBAR.
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Text of the letter was previously published in 147 Taxcore, 7/31/13.

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