ACA American Citizens Abroad

American Citizens Abroad (ACA) has written a concerned letter to President Obama to highlight the unintended and extremely negative effects which recently changed or proposed US banking and taxation laws are having on US citizens living overseas. 

The situation has become so untenable that ACA has sent  pleas to correct the situation to President Obama, as well as  Secretary of the Treasury Geithner and Chairman Volcker of the President’s Task Force on Tax Reform.

US citizens living abroad are being deprived of normal banking services, both overseas and in the United States, merely because they are American citizens.  US laws and regulations which harass US citizens overseas and treat them as automatic tax evaders actually harm the country overall.

Three letters were mailed by ACA on Friday 17 July 2009 – one to President Obama, one to Secretary of the Treasury Geithner and one to Chairman Volcker of the Tax Panel.

The letters mentioned "the perfect storm which is currently brewing against the estimated 5 million Americans who live and work abroad." and that a combination of existing and proposed US policies is making their banking and personal
situation untenable.

The four policies described are:

First, the proposed reinforced Qualified Intermediary (QI) regulations are so draconian that banks
overseas are getting rid of American clients rather than face the administrative hassle and the perceived
legal risks of complying.

Second, the Patriot Act, in 2001, tightened the Know-Your-Customer (KYC) regulations. Many US
banks have decided that this KYC clause cannot be fulfilled if the customer lives overseas. Consequently,
these banks are closing accounts of US citizens on the sole ground of their overseas addresses.

Third, the new more inclusive Treasury FBAR filing requirements for foreign bank accounts are
excessive and carry unduly harsh penalties for not filing or incorrect filing, even when this is done
unknowingly.

Fourth, US citizenship-based taxation, unique among nations, subjects overseas Americans to double
taxation.

Copies of the letters were sent to several others in Washington.

ACA has a collection of recent press articles on this issue.