Congressional tax writers get advice from overseas

A  U.S.  congressional committee considering  changes in the nation’s tax code received more than 100 suggestions from expats, said the American Citizens Abroad, an expat advocacy organization.

The House Ways & Means Committee has set up a series of working groups to consider tax code changes. Among these is the international tax reform working group .

“Although regrettable that Congress has been cited as putting individual taxation as secondary to corporate taxation, it is clear that Congress cannot ignore the message from Americans overseas that highlight the far reach of the IRS and the multitude of personal difficulties encountered because of citizenship-based taxation, said the organization on its Web site.

Even the Internal Revenue Service is promoting tax reform or at least the national taxpayer advocate.  Nina E. Olson is the advocate.  She said on the advocate Web site that her agency has established a vehicle to receive taxpayers’ suggestions about tax reform.

Tax complexity doesn’t occur just because of ‘big money; special interests,” she said. “It occurs because of the tax provisions that benefit each one of us. We are the special interests. And until we acknowledge that, tax reform discussions will deteriorate into shouting matches and finger pointing about cutting ‘their’ special tax breaks and not ‘ours.’ What would you give up in exchange for a simpler tax system?”

American Citizens Abroad said it was pleased that Bloomberg News published an article about the plight of U.S. expats trying to comply with the system that taxes all the income of citizens no matter where it is earned. The article quoted expats who had filed suggesting recounting the expense and effort they have to spend to comply with the U.S. rules. Some have surrendered their citizenship.

The organization supports elimination of citizenship-based taxation in exchange for a geographical one.

Money earned within the United States would be taxed there, but money earned by U.S. nationals outside the country would only be subject to taxes from the country in which the money was earned.

Most expats are suppose to file their U.S. tax return by June 15 this year, although there are procedures for extensions.

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