Expat advocate calls for residency-based taxation

American Citizens Abroad, an expat advocate group, said it has submitted a detailed proposal concerning taxation of Americans abroad to the Senate Finance Committee on International Tax Reform.

The major proposal is for residency-based taxation. That is, U.S. citizens abroad would not be taxed at all on their foreign income.

The organization also called for a streamlined, comprehensive and non-punitive compliance program for those Americans already residents overseas who have not been reporting compliance under present citizenship-based tax rules.

Residency-based taxation is the reason the U.S. government is seeking information about its citizens from foreign financial institutions. This has caused problems for U.S. expats.

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