A growing proportion of U.S. born expatriates do not feel they should be required to file taxes while they live abroad and about one-fifth of them are considering renouncing their U.S. citizenship, according to a new survey.
The survey, by Greenback Expat Tax Services, a firm that specializes in helping expatriates with their tax issues, noted that 9 million U.S. expats live and work abroad, but since they retain their U.S. citizenship, they also still have federal tax reporting requirements. Greenback polled more than 3,800 U.S. expats between March and May for its survey. It found that 66.8 percent of U.S. expats do not feel they should be required to file U.S. taxes while living abroad. That number has risen 1 percent since a similar survey by Greenback last year.
The tax reform law that Congress passed last December lowered overall tax rates for U.S. individual and business taxpayers but did not aim to provide relief for expat taxpayers, although their rates would also have dropped. But many expats still object to the increased reporting requirements that were ushered in by FATCA, the Foreign Account Tax Compliance Act, which Congress passed as part of the HIRE Act of 2010. That law required foreign financial institutions to report to the IRS on the assets they held from U.S. taxpayers, which led many banks abroad to close the accounts of U.S. expatriates in order to avoid the extra reporting burden.