Group helps taxing concerns of US citizens in France

For US citizens living overseas, taxation is major problem

31 December 2019
American Citizens Abroad’s Joan Fulton, left, and Marylouise Serrato
By Jane Hanks

Americans living in France are being offered help and assistance by a not-for-profit organisation whose mission is to educate and inform the estimated nine million US citizens abroad.

Marylouise Serrato, executive director of American Citizens Abroad (ACA), said most of the people they assist share similar problems, whether they live in France or elsewhere.

“One big problem has been opening a bank account abroad,” she said.

“This came after Congress passed the Foreign Account Tax Compliance Act legislation in 2010 to prevent tax evasion through the use of undeclared offshore bank accounts.

“The legislation requires that both US citizens and foreign banks report on the accounts held by US citizens overseas. Most foreign banks require US citizens to complete a W9 form and provide their US social security number, verifying they are tax-compliant.

“As a result, many banks have found it easier to refuse a new US citizen client, rather than go through this administrative procedure. This is especially true for small regional banks, who may be unfamiliar with the law.”

A related problem is the refusal of any US-based banks to maintain or open accounts for American citizens when they cannot produce a US residential address. 

To help with this, Ms Serrato said they worked with the State Department Federal Credit Union to offer an account through membership in ACA.

For US citizens living overseas, taxation is another major problem.

Many Americans do not realise they have to file annual tax returns for the USA, even if they are filing and paying taxes in the country where they are resident. This is because the US adheres to a system of taxation based on citizenship and not on residence (where the money is earned). US tax filing is complex and costly, with high penalties for failure to file bank reporting forms.

ACA, based in Washington DC, is campaigning for the US to adopt a system of residence-based taxation, which would mean that US citizens overseas would not be taxed by the US on any income earned outside of the United States.

“ACA continues to provide information and updates on current US tax policy and helps by providing resources such as a tax preparer direct-ory, which lists a wide range of professionals: accountants, investment managers and lawyers,” said Ms Serrato.

ACA has been in existence for more than 40 years and Ms Serrato said it was one of the few non-partisan advocacy organisations for Americans overseas.
ACA has launched a series of monthly podcasts as a way of informing and communicating with the overseas community.

The podcasts cover a wide range of topics in response to the thousands of emails and social media messages it receives.

As well as topics such as tax-ation and compliance, podcasts cover other subjects such as educational options for children overseas, and issues faced by trailing spouses/partners.

You can join ACA for $70 a year. Visit the americansabroad.org website to find out more.

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