updated 2:57 PM CEST, Sep 21, 2023

ACA in drive to fund update of residence-based taxation research, ahead of perceived need

The American Citizens Abroad Global Foundation – the sister educational and research organization to the Washington, D.C.-based American Citizens Abroad advocacy group – today is unveiling a campaign to raise US$75,000 to fund a research project that it plans to help provide the ACA and others with fresh data that the ACAGF says will help to support arguments in favor of moving the U.S. to a Residence-Based Taxation system.

The ACAGF says it is hoping to raise the US$75,000 by July 1, adding that the ACA has already raised US$25,000 for the cause (leaving just US$50,000 to hit the target).

It also says, in a statement on its website, that the new data, once compiled, "will be presented at Congressional hearings." Information as to which Congressional hearings these would be isn't given, but ACA has said that it expects there to be a number of "House-side and Senate-side hearings" in the next few months.

                               And in an interview, Charles Bruce (pictured left), the legal counsel for ACA as well as ACAGF chairman, said the ACAGF "wouldn't be doing this if we didn't think there was a real possibility that [Washington lawmakers] are going to revisit" the idea of a possible move to an RBT system, later this year.

Bruce declined to say why the ACAGF believed the issue was expected to be back on the table again so soon, but said it was seen to be enough of a possibility to justify a revisiting of research that the organization retained a consultancy to carry out in 2017. 

The results of that research, carried out by the non-partisan, Washington, D.C.-based District Economics Group (DEG), may still be found on the ACA's website, where it includes a 10-page "side-by-side analysis" of the two taxation systems, along with certain provisions that, given the passage of time since it was compiled, might need to be amended.

"It's a roadmap for helping decision-makers [figure out] how RBT might be made a reality," said Glen Frost, president of the ACAGF, as well as managing partner of Frost & Associates LLC, a Washington, D.C.-area tax law specialist. 

Increasing calls for move to RBT 

As this and other publications have frequently reported, especially recently, the U.S. is the only major country that employs a tax regime based on an individual's citizenship rather than place of residence, and this CBT regime is seen as contributing to many of the tax-related problems American expats face abroad.

For example, individuals who were born in the U.S. but never lived there for their entire lives after leaving as infants are, as a result of the CBT regime, expected to file U.S. tax returns every year they make more than a very low minimum amount, and potentially owe taxes to Uncle Sam as well; they will also need to file a Foreign Bank Account Report for every year that the aggregate value of their non-U.S. bank or "foreign financial accounts" exceeds US$10,000.

As a result, many expat groups, including the ACA, have become increasingly more vocal in their calls for a move to RBT as soon as possible. In January, the ACA was among the first of a group of organizations and companies in the American expat space to join forces in the creation of a new, Washington, D.C.-based lobbying organization, aimed solely at persuading U.S. lawmakers to move the country to a residence-based tax regime, by, "as approved by [its] members," providing "those responsible for tax reform with the data, information, background and details as to why residence-based taxation should be enacted." 

Other current members of the so-called Residence-Based Taxation Coalition include three tax, property and wealth advisory businesses – Adrian Leeds Group, Americans Overseas, Bright!Tax, Dunhill Financial, White Lighthouse Investment Management – as well as the Association of Americans Resident Overseas, AmCham Abu Dhabi, the American International Club of Rome, the Swiss-American Chamber of Commerce, and the National Taxpayers Union. 

A spokesperson for the organization says companies and groups interested in joining the coalition are welcome to get in touch, and that it expects there will be more interest in joining as the RBT issue becomes more public. 

To read the ACAGF's statement about its planned RBT research, and why it's seen to be needed, click here.

To view Bruce and ACA executive director Marylouise Serrato discussing the CBT to RBT issue, the new RBT Coalition, and what its constituent members are hopeful it will achieve – as part of the 2021 Expats Virtual Financial Summit, which took place via Zoom, here, in January – click here.