Time to Reform U.S. Tax Laws for Americans Overseas

“Stop making life difficult for Americans of modest means who live outside of the U.S.”

-Ann Elizabeth Pollak

Dear Congress,

Born in Washington, D.C., I lived the first half of my life on American soil—in northern Virginia, Nashville, Tennessee, and finally, in Saint Louis, Missouri, where I completed a university degree in business, with a specialization in accounting, and then worked in commercial banking.

I moved to Italy in 1989 and have regularly filed my U.S. tax returns. As a self-employed U.S. person, I have been required to pay my social security to the United States. During peak years of income, I also had to pay U.S. income taxes.

The FATCA legislation has been a major hassle for me. My bank of the past 30+ years has allowed me to keep my bank accounts, but because of FATCA it won't let me invest in certain assets. Some banks in Italy won't even take “U.S. persons” as clients because of FATCA and its reporting requirements.

Finally, now that I'm retired and receiving my social security, I have no earned income to report, but I still must file a US tax return, which costs me around EUR 400 to prepare.

I urge Congress to take action with respect to two issues:

1) Amend the FATCA legislation so that its impact is limited to high-income, high-net-worth individuals living in the United States. Stop making life difficult for Americans of modest means who live outside of the United States. Allow Americans overseas to participate in the normal retirement planning vehicles available in their respective countries where they live. These are now “off-limits” because foreign financial institutions must bear an excessive burden in U.S. reporting formalities and costs.

2) Enact legislation to overhaul the U.S. individual tax system for expatriates which dates back to the days of the Civil War. In this regard, Representative Darin LaHood (R, Ill.) has proposed a bill that would let Americans abroad choose whether to join a residence-based system that would exempt their foreign income from U.S. taxes but make them subject to taxes where they live, which could be a country with low or no income tax. Under this bill, American expats would still be required to pay U.S. taxes on U.S.-sourced income.

Respectfully,

Ann Elizabeth Pollak

American citizen

Long-term resident of Italy