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Firm Calls for Comprehensive Tax Reform to Address Filing Burdens and Compliance Challenges Faced by Americans Living Abroad
NEW YORK, NY, UNITED STATES, October 12, 2024 — Bright!Tax, an award-winning U.S. expat tax services firm founded by American taxpayers living abroad, addresses the recent spotlight on the issue of double taxation following Presidential Candidate Donald Trump’s proposal to eliminate taxes for Americans abroad. The firm emphasizes that double taxation is rarely the primary challenge for the majority of U.S. expats and urges policymakers to focus on the broader complexities of the U.S. tax system that impact millions of Americans living overseas.
“While we appreciate initiatives aimed at alleviating financial burdens on U.S. expats, the proposal to eliminate double taxation does not address the core issue,” said Katelynn Minott, CPA, CEO of Bright!Tax. “For most Americans abroad, the real challenge lies in the cumbersome and complex process of filing annual tax returns to utilize existing provisions that already prevent double taxation.”
Named among the AICPA’s “40 Under 40” and author of the award-winning Bright!Tax blog, Minott has been a thought leader in expat taxation for over a decade. Under her leadership, Bright!Tax has worked with more than 20,000 of the estimated 9 million Americans living abroad. Notably, over 80% of Bright!Tax clients do not owe any tax to the IRS due to mechanisms like the Foreign Earned Income Exclusion (FEIE), Foreign Tax Credit (FTC), and tax treaties. Despite owing no taxes, these individuals still face the obligation of filing U.S. tax returns annually.
Complex Filing and Reporting Requirements Pose Greater Burden
In addition to income tax returns, U.S. expats are subject to a multitude of additional reporting requirements concerning foreign accounts, assets, and businesses. Regulations such as the Foreign Account Tax Compliance Act (FATCA) and the obligation to file the Report of Foreign Bank and Financial Accounts (FBAR) have significantly increased the compliance burden for everyday taxpayers.
“The extensive reporting obligations are overwhelming for most taxpayers abroad,” Minott explained. “These policies, intended to prevent tax evasion by catching white-collar criminals hiding assets outside the U.S., are inadvertently making financial wellbeing challenging for compliant, law-abiding citizens.”
Double Taxation Affects Specific Groups
While double taxation is not the primary issue for most U.S. expats, it does significantly impact specific groups such as business owners and investors overseas. Provisions like the Global Intangible Low-Taxed Income (GILTI), which became effective during the Trump administration in 2018, and the Passive Foreign Investment Company (PFIC) reporting requirements for pooled fund investors, have led to unintended tax liabilities for these individuals.
“Business owners and investors are facing true double taxation under current laws,” noted Minott. “Comprehensive reform should address these complexities to ensure fairness across all segments of the expat community.”
Discrimination in Access to Banking Services
Bright!Tax also highlights the intense discrimination U.S. expats face regarding access to banking services both in the U.S. and abroad. Financial institutions, wary of the costly reporting requirements imposed by FATCA since its enactment in 2010, often choose not to work with clients who have multinational circumstances.
“Banks are increasingly shutting their doors to U.S. taxpayers because of the onerous reporting burdens,” Minott said. “This leaves many Americans abroad without essential financial services, further complicating their lives.”
Call for Holistic Tax Reform
Bright!Tax advocates for a holistic approach to tax reform that not only considers the elimination of double taxation for specific groups but also addresses the overall complexity and compliance challenges faced by the broader expat population.
“Meaningful change requires more than targeting double taxation,” Minott concluded. “Policymakers should focus on simplifying the tax filing process and easing reporting obligations to truly support the millions of Americans who live and work abroad.”
About Bright!Tax
Bright!Tax is an award-winning, cloud-based U.S. expat tax services firm specializing in helping Americans living abroad navigate the complexities of U.S. taxation. Founded by American CPAs who are expats themselves, Bright!Tax has worked with over 20,000 clients in more than 190 countries. Under the leadership of CEO Katelynn Minott, CPA, the firm provides personalized solutions that ensure compliance and financial confidence for U.S. citizens worldwide.
Minott, a recognized thought leader in expat tax, has been instrumental in shaping industry discussions through the Bright!Tax blog and other publications. Her commitment to client advocacy and tax education has earned her accolades, including being named among the AICPA’s “40 Under 40.”
For media inquiries or to schedule an interview with CEO Katelynn Minott, please contact hello@brighttax.com or +1-212-465-2528.
This press release is for informational purposes only and does not constitute legal or tax advice. Individual circumstances may vary, and expats are encouraged to consult with a professional advisor.
