ACA's Topline Report from Washington, D.C. - June 2025

June 16, 2025

ACA's Topline Report from Washington, D.C

  • A summary of the webinar with Congressman LaHood that ACA hosted on June 4th.
  • A wrap up of our week of meetings up on Capitol Hill, including insights into what is going on with Residence-based taxation (RBT) and the Big Beautiful Bill. 
  • ACA's concerns with the Revenge Tax and Remittance Tax Provisions.
  • ACA’s exchange with the National Taxpayer Advocate.
  • An ACA RBT Intelligence briefing for members - if you are not a member, join today to listen!

What we learned about the Residence-based taxation for Americans Abroad Act during our recent webinar with Congressman LaHood

Congressman LaHood is committed to getting Residence Based Taxation for Americans Abroad Act (H.R.10468) (RBT bill) legislation passed.

RBT was not included in the current Big Beautiful Bill (BBB) House Bill, but it is still alive and well and moving forward.

RBT didn't make it into BBB in part because 1) there still is no “score” i.e., cost projection for the LaHood legislation, which is prepared by the Joint Committee on Taxation (JCT) or the Congressional Budget Office (CBO) and 2) there are concerns that some of the RBT bill's provisions would be challenged as not satisfying the "Byrd" rule, a Senate rule that prevents the inclusion in a Reconciliation bill of provisions that are deemed unrelated to the federal budget.

A strategic decision was made to look at introducing RBT in one of the other tax bills that will be produced later this year.  One option is a tax extender bill – which is a bill that will capture tax provisions that did not make it into BBB.  (More on this below).

A CBO/JCT score (costing of the legislation) will probably be available this summer.  The JCT is familiar with RBT and the tax filing problems of U.S. citizens overseas.  The delay in getting a score has more to do with demands on the office than lack of knowledge about RBT and the problems.  Depending on the "score" some refinements may be made to provisions in the bill.  

Even with refinements, the general contours of the bill will remain unchanged; it will exclude from U.S. taxation income that is unrelated to U.S. economic activity.  The bill has been drafted to eliminate U.S. taxation of foreign income and reduce or eliminate the need for tax filing from abroad.

Congress is aware of RBT, but members have many issues on their plate, so the community needs to make this one important to their Representatives.  Congressman LaHood asks the community to help by letting their representatives in Congress know about the bill.  Double taxation of Americans abroad is a bi-partisan issue and bi-partisan support of the bill is important.  All outreach to Congress is helpful.

ACA has an online write-in campaign where you can help do this.  A couple of clicks and your messaging is in Congressional offices.

Congressman LaHood appreciates all the work that advocacy groups like ACA and others are doing to support his bill!  ACA thanks the Congressman for taking the time to present to our members!


What ACA is hearing in our meetings on Capitol Hill 

ACA is always available to meet with the Congress and Administration.  We are one phone call or Uber ride away from meetings on Capitol Hill.  Offices we meet appreciate hearing from real individuals who know the community and have lived and/or are living the problem.  Our team of DC professionals are those individuals!

ACA is still hopeful that RBT can be picked up and rolled into a Senate version of the BBB, so we focused on a week of meetings with Senate offices.  RBT will require a Senate champion whether it becomes part of the BBB or part of a tax extender bill.

There is active discussion for several tax extender bills.  These are bills that will include provisions that are not picked up in the BBB bill. Many of the Washington, DC-based tax advocacy groups ACA partners with, as well as members of Congress we met with, acknowledge that there are many provisions that for various reasons will not get picked up in BBB, so it is inevitable that one or more tax extender bills will need to be passed, ideally before the end of this year.

ACA met with both Republican and Democratic Senate offices.  Most understand the need to move to RBT and have no opposition in theory to eliminating double taxation of Americans abroad.  ACA's advocacy work to educate offices is paying off, as many Representatives are well-educated on the tax issues of U.S. citizens overseas.   

Senate offices want to see a "score" and understand the revenue implications.  Fortunately, ACA's RBT modeling, which has been costed by DC scoring agency DEG, mirrors much of Congressman LaHood's bill.  ACA is providing these offices with our "score", giving them confidence that, with some refinements, RBT legislation can be revenue neutral to the federal budget. 

Senate offices are concerned about “leakage” which is the ability of RBT policy to provide loopholes for tax evasion.  Fortunately, ACA's RBT modeling has taken that into consideration and includes robust guardrails to prevent abuse of RBT by bad actors.  This gave many offices we met with confidence that a good score can be achieved. 

ACA also met with House members to continue to build support for Congressman LaHood's RBT legislation so that it can be re-introduced into Congress with a maximum number of cosponsors.  House members, both Republicans and Democrats, echo the concerns of the Senate - we need a score and the legislation must be tight against abuse.


BBB and the “Revenge Tax”

The BBB that passed the House includes a tax dubbed the “Revenge Tax,” formally known as Section 899.  The tax targets countries that enact tax policies deemed to be discriminatory to U.S. companies, such as digital services taxes and a mechanism known as the undertaxed profits rule (UTPR) in the OECD’s global tax agreement.  Wall Street and others have raised concerns that the Revenge Tax (of up to 20%) will dampen foreign investment.  

The U.S. investments of Americans living in countries in the crosshairs of the Revenge Tax will feel its direct impact.  There is no credit or other safe harbor provision in the bill to spare them.  ACA discussed this with Senate offices who were just getting their arms around it.  We will continue to raise this concern.


BBB and the Remittance Tax

The BBB that passed the House also includes a Remittance Tax - a provision that would apply a supplemental tax of 3.5% on remittance funds transfers from the U.S. going abroad.  See: ACA comments on excise tax on remittance transfers provision included in the House tax bill.  U.S. citizens who make funds transfers to themselves or others living overseas and incur the remittance tax can recoup it on their next annual tax filing.  ACA advocated strongly against the remittance tax provision, explaining to offices on both sides of Capitol Hill that it will create yet another compliance nightmare for U.S. citizens abroad and the foreign financial institutions they ask to facilitate the transfers.

FATCA compliance forced many foreign financial institutions to lock out U.S. citizens; ACA is greatly concerned the Remittance Tax may have a similar effect.  ACA has found allies in the fight against the Remittance Tax and will be working other organizations to persuade Congress to remove the provision from the BBB.  See: ACA Opposes Remittance Tax Proposal in the House Big Beautiful Bill Headed to the Senate.


Americans Abroad have an ally in the National Taxpayer Advocate

ACA also met with Erin Collins, the National Taxpayer Advocate (NTA).  Advocate Collins is a strong supporter of the community of U.S. citizens overseas.  We are providing her with input on the tax and compliance problems for her year-end report.  High on our list (and on hers!) is the Remittance Tax provision.

ACA also learned that beginning September 30, 2025, the IRS will no longer be issuing paper checks and moving towards electronic refunds.  It appears that soon thereafter there will also be a requirement for individuals to remit to the IRS electronically.  This will come as good news to anyone who has received a paper check from the IRS that they then struggled to cash, but will present challenges to those who have no online account with the IRS and/or no U.S. bank account.  ACA will be working with the NTA to provide her with our concerns on this policy change. 

ACA reminds members that there is a solution to help with electronic payments/deposits and that is by having a State Department Federal Credit Union account (SDFCU)  ACA members can apply for an SDFCU account via their ACA membership and this will facilitate receiving and remitting payments to the IRS.  SDFCU can work with U.S. citizens overseas with no need to provide a U.S. address.  Your account with SDFCU is for life, a guarantee that you will have U.S.-based banking services. 

ACA will have more information for the community on this matter in the coming weeks. 


Washington, DC Intelligence 

ACA is working on gathering intelligence up on Capitol Hill through our partnerships with tax advocacy organizations, our lobbyist and professional contacts.  Much of what we heard in our meetings has been confirmed to us by others "in the know," including a recent article in Semafor that speaks to the tax extender legislation that will be coming post passage of BBB. 

ACA is using our insider knowledge to make meetings with officials in the Administration and Congress to ensure that RBT and all the tax policy issues affecting U.S. citizens overseas are in consideration and in the forefront.


ACA RBT briefing for members

ACA will be hosting a members-only webinar with our Executive Director, Marylouise Serrato, and our ACA-PAC Assistant Treasurer, Phil Levis, about our efforts on Capitol Hill to enact RBT.  Your questions are most welcome!  Look out for the announcement coming soon.

Remember to donate today to ACA's efforts.  Only ACA can provide this kind of coverage and insight of Capitol Hill for US citizens living and working overseas.

 

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