ACA NEWS UPDATE NOVEMBER 2009
AMERICAN CITIZENS ABROAD
The Voice of Americans Overseas
MOVE voting bill signed into law
Foreign Account Tax Compliance Act
Protests multiply concerning IRS FBAR tactics
Proposed health care legislation: Status
ACA speaks up!
Employment: Franken amendment on Federal contractors
Overseas vets see APO/FPO endangered
IRS guidance on exit tax
Contact Us: Let me count the ways!
While you're surfing …
Move Voting Act Now Law
President Obama signed the National Defense Authorization Act for Fiscal Year 2010 (H.R. 2647) into law on 28 October 2009. Within this act was the Military and Overseas Voter Empowerment Act (MOVE), which embodies a number of changes in the legislation specific to Americans voting from overseas, the UOCAVA (Uniformed and Overseas Citizens Absentee Voting Act).
States will now be required to offer overseas voters electronic options to request and receive registration and ballot applications and to receive blank, unvoted ballots. States must provide overseas voters blank ballots 45 days before the election, unless the state obtains a specific “hardship waiver” in a given election.
Various measures included in the new law will eliminate other barriers that have traditionally excluded many overseas votes from successfully casting their votes. Federal Write-in Absentee Ballots can be used for primary and special elections for federal offices. Ballots cannot be rejected for reasons unrelated to voter qualification (such as notarization requirements, paper type, or envelope size). States must develop a tracking system by which voters can determine whether their ballot has been received.
New Bills in Congress Regarding Foreign Bank Accounts
Once again, proposed legislation has been introduced in Congress that overlooks the circumstances of the ordinary American residing abroad. On 27 October 2009, identical bills H.R.3933 and S.1934 were introduced in the two houses. The joint press release issued by the House Committee on Ways and Means sets the tone with its subtitle: “House-Senate Proposal Detects, Deters, Discourages Overseas Tax Evasion”. The press release estimates that the proposed act “would prevent U.S. individuals from evading $8.5 billion in U.S. tax over the next ten years.”
ACA immediately reacted with a letter addressed to the sponsors and relevant committees on 3 November. “Although ACA understands and sympathizes with the efforts of the U.S. Congress to close the door to tax cheats, you must remember that most Americans working and living overseas are not tax cheats but are performing significant services for the United States,” ACA reminded the congresspersons. The letter then went on to suggest that there are limits to what foreign banks and investors will be willing to support in order to do business with the US. It pleads for revisions in the text to make its impact less onerous, and concludes “American Citizens Abroad fears that the current Congressional approach to stop the few thousand American citizens that evade taxes by imposing its laws on other nations risks to open up a Pandora’s box, to create suspicion and friction with many other governments and to have a long-term negative impact on U.S. trade and commerce in general.”
FBARs – Protests Continue
In early October, ACA sent a letter to the Internal Revenue Service and the Department of the Treasury, advocating that certain categories of individuals be relieved from having to file the FBAR (Report of Foreign Bank and Financial Accounts) form. ACA contends that:
§ individuals subject to US taxation should not have to report on a foreign financial account in which they have no interest, but over which they have mere signatory authority
(eg, the bank account of a foreign employer);
§ Americans with a minority interest in a foreign entity may neither have access to FBAR-required information and/or find that foreign partners will refuse to be subjected to reporting to the US Treasury; and
§ in the case of Americans living abroad and married to foreigners, the foreign spouse may object to information on a joint account being reported to the US Treasury. Are these individuals condemned to having separate accounts from those of their spouses?
Jane Bruno, a tax lawyer specializing in service to overseas Americans and a long-term friend of ACA, also sent a missive to IRS Commissioner Douglas H. Shulman. “I have been a tax preparer for Americans living overseas for more than 20 years,” she wrote, “and I am frankly appalled at the harsh and unfair approach taken by the Treasury Department with respect to the requirements set forth in this form [the From TD F 90-22.1 (FBAR)].” She explains that the information given by the IRS has been so confusing and incomplete that even professional tax preparers don’t know what to advise their clients. Clients “are worried to death about what is going to happen,” she continues, “and I am not able to reassure them with anything other than the fact that enforcement of this policy against them would surely be a travesty of justice.”
Thanks to Ms. Bruno and other professionals who have spoken out on this issue.
Another forthright preparer is tax expert Phil Hodgen, who has done the seeming impossible by attacking this all-too-serious subject with humor. See his fine piece here.
Meanwhile, the Wall Street Journal reported on 15 October 2009, the deadline for the amnesty program, that the IRS said more than 7,500 US taxpayers had stepped forward to acknowledge previously undeclared overseas accounts. There is as yet no estimate of revenue gained through this program and related penalties. The IRS, which has cut back on the number of its offices abroad over the past years, will be opening offices in Beijing, Sydney and Panama City and beefing up staff at other international offices.
Health Care Debate Ongoing
No comprehensive health care legislation has yet been passed. At present, the House “America’s Affordable Health Choices Act of 2009” (H.E. 3200) specifically excludes overseas Americans from the proposed mandatory coverage. The Senate bill, “America’s Healthy Future Act of 2009” (S.1796) does not exclude Americans living abroad.
The Wall Street Journal, in an article entitled “Rhetorical Tax Evasion”, even suggests that failure to buy mandated health insurance might lead to healthy fines.
Meanwhile, U.S. territories are asking that they be included in any healthcare bill that is passed. The governors of the Northern Marianas islands (CNMI), Guam and the U.S. Virgin Islands want their areas to receive the same health subsidies that states in the mainland are getting. Citing “longstanding discriminatory treatment of U.S. citizens in the insular areas of the United States in federal health care policy,” they propose “to ensure that federal health care benefits are available to all Americans, regardless of where they reside.”
Thanks to AmCham of the Philippines for the heads-up on this item.
ACA is carefully following various provisions of proposed health bills which would impact on Americans abroad, and is in contact with key congressional offices on the subject.
ACA Directors Speak Out
§ An article by ACA Executive Committee member Jonathan Lachowitz recently appeared in the publication Suisse. In it Jonathan, who is a Certified Financial Planner in both the US and Switzerland, gives planning tips for Americans residing in Switzerland, and points out that moves that are wise from a Swiss tax point of view may backfire when US tax rules are taken into account.
§ Gregory Smith, also member of the ACA Executive Committee, wrote a sharp letter published in the New York Times, challenging the presumption that Americans with foreign bank accounts are all wealthy tax evaders.
Employer-Employee Relations And Federal Contractors
Senator Al Franken (D-MN) has introduced an amendment to the Defense Appropriations Act (H.R. 3326), which would bar any contractor or subcontractor from getting work on any existing or new federal contract if the firm mandates that its employees or independent contractors resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or specific types of tort claims.
This is the outgrowth of a situation where an American employee working for an American contractor in Iraq was harassed, then drugged and gang raped by fellow employees, and the contractor tried to suppress her turning to US courts for redress, claiming that her case fell under a mandatory arbitration clause.
The amendment was immediately passed in the Senate by a 68-30 voice vote. H.E. 3326 had previously passed the House, and this addition by the Senate has led to a Senate-House conference on the bill.
APO, FPO Privileges Being Terminated for Some Vets Abroad
The Military Times reported on 19 October that close to 5,000 military retirees and their survivors living overseas will no longer be able to use APO and FPO addresses at US embassies and consulates after the end of the year. Retirees with APO or FPO addresses at military installations, and Defense Department personnel officially assigned to embassies and consulates will not be affected.
For many who rely on these addresses for Tricare Mail-Order Pharmacy deliveries and other vital mail, and particularly those who live in areas where local mail service is not reliable, this is a real shock. A long-time ACA member writes, “I depend on the APO for bank, Social Security, IRS, absentee ballots, magazines, veterans business, etc. The end of the APO for me will change my life.”
The decision is centered on cost factors. Mail going to addresses at embassies and consulates has been handled by the State Department, which is switching to a new system of DPO (diplomatic post offices), and says it can no longer assume the costs for mail sent to military retirees. The Defense Department, by law, cannot pay the State Department for delivery of military retiree mail.
Gilbert Wells, military retiree and ACA Country Contact in Portugal, is actively working towards a legislative remedy for this shabby treatment of American veterans.
IRS Issues Guidance on “Exit Tax” Upon Citizenship Renunciation
The Internal Revenue Service has issued technical guidance on implementation of the new “exit tax” for Americans who renounce their citizenship, effective as of mid-June 2008, when the related law came into effect. In sixty-plus pages, Notice 2009-85 explains how one’s “estate” is taxed as of the day prior to expatriation – and how some financial transfers can still be taxed subsequent to expatriation. Clearly not a topic to be approached without competent professional advice!
20 November 2009
American International Club Welcome-to-Geneva luncheon for the Honorable Donald S. Beyer, new US Ambassador to Switzerland and the Principality of Liechtenstein. ACA members can sign up at “member” rates at firstname.lastname@example.org.
17-19 March 2010
Overseas Vote Foundation Summit 2010, Munich, Germany.
19 March 2010
ACA annual super fundraising auction, Ramada Park Hotel, Geneva. donations of auctionable goods and services welcomed!
19-24 April 2010
ACA will participate in Overseas Americans Week in Washington, DC.
Will we be seeing you there? Links to all the above can be found on the ACA website.
By Any Means, Contact ACA!
ACA Headquarters in Geneva
Facebook – American Citizens Abroad group
Your input is important to us.
Let ACA know what you feel strongly about, how you can help, what you feel we can do better, by whichever means is best for you.
while you’re surfing …
And now for some fun – at Oddcast.com!
By its technical title of a “free demo to create avatars using text-to-speech”, you’d never expect it to be so intriguing. Choose your language: English, French, Finnish, Japanese, Hindi… – type the text you want to hear and the cartoon character SAYS it – and his/her eyes will also follow your cursor around the screen!
Within each language you can even get regional variations – eg, for English you can choose variations for US, UK, Irish, Scottish, Indian, South African. Try, for example, the variations in pronunciation of “antidisestablishmentarianism” or “When will merry Mary marry?”.
Not only fun and games, but no doubt the way of future language learning.
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Visit www.jgam.com for further information.
"Technologies to Empower Your Business"
BizSoft offers easy-to-use software applications that save money
BizSoft – the right choice for creation of custom applications,
If you would like to become part of the dynamic volunteer team that powers ACA, there is a constant need for additional staff – especially if you can work from your home.
Especially needed are:
research assistants, database managers, event planners and coordinators,
tax specialists, and lawyers.
Interested parties may contact ACA's Geneva office:
5 rue Liotard
CH-1202 Geneva, Switzerland
Phone and fax: +41 22 340 0233
Or send us an E-mail
Articles from this edition can be read on the ACA Website
The ACA News Update Editing and Publishing team
Editor-in-Chief: Dorothy van Schooneveld – Senior and Web Editor: Karl Jauch – Editor: Lori Hakulinen
This News Update is, like ACA itself, of, by, and for Americans abroad. ACA is staffed entirely through the efforts of volunteers, with its primary income source being membership fees and donations from concerned individuals.
Disclaimer: While ACA makes every effort to be accurate in the information it transmits, such information is not to be considered a substitute for specific and qualified professional advice.
American Citizens Abroad (ACA)
The Voice of Americans Overseas
5 Rue Liotard
1202 Geneva, Switzerland
American Citizens Abroad (ACA), the voice of Americans overseas, is a non-profit, non-partisan, all-volunteer organization that represents the interests of Americans living and working outside the U.S. to the Executive Branch of the U.S. Government, the U.S. Congress and the U.S. Federal Judiciary to insure that Americans overseas are treated with equality and fairness. ACA keeps Americans overseas informed and supports their role as informal representatives of the United States. To learn more about ACA please visit our website, www.americansabroad.org
Disclaimer: While ACA and its board members make every effort to be
accurate in the information they transmit, such information is not to
be considered a substitute for specific and qualified professional
ContactAmerican Children Abroad
Ben and Helena Henderson
Prague, Czech Republic
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