A Nebraskan in Australia bemoans double taxation, hopes for relief

“In the past the United States has railed at other nations for treating U.S. citizens living abroad unfairly, even as the United States is treating millions of Americans living abroad like 2nd class citizens and imposing unfair taxes and burdens upon us – double taxation, FATCA, FBARs – a mistake that overseas Americans are paying for every day.”

— Beth Hodge

Dear Congress,

The nationality-based U.S. tax system is destroying the lives of Americans who are bona fide tax residents of other countries. The system puts a tremendous burden on millions of ordinary people who happen to live outside the United States.

I’m from Nebraska, moved to Australia in 1980 after meeting and falling in love with an Australian service man who was leading a course for U.S. service personnel at Offutt Air Force Base in Bellevue.

My life is in Australia. I do not receive Social Security (not enough points) nor am I registered for Medicare. I did not even know I had to pay U.S. taxes until after my parents passed in 2020 and I received an inheritance.

I received a note from the consulate many years ago to that effect but I was ignored by the taxation office when I wrote ‘not enough income’ and asked them a couple of questions twice (pre home computers) so I gave up. Now if I sell my home of over 30 years the IRS wants a slice? This is usurious and totally unfair! The house was bought with my Australian husband’s money and will affect my 3 Australian stepchildren’s  inheritance. The IRS also feels it’s fair to tax any interest I may earn in my country of residence. Again, this is usurious and has nothing to do with the US.

The United States and Eritrea are the only two nations on the globe to tax their citizens globally. Taxes on what I make in the United States being taxed by the United States? Fair enough, but you are making it intolerable for Americans who live and work in another country to plan for retirement and often undertake normal day-to-day banking. Not to mention the complexity, cost and length of filing a U.S. return plus finding someone overseas whom you can trust to know what they are doing. A form 1040 SR is 4 pages for an America-based retiree. My tax form was 70+ pages!

Fair play?

In the past the United States has railed at other nations for treating U.S. citizens living abroad unfairly, even as the United States is treating millions of Americans living abroad like 2nd class citizens and imposing unfair taxes and burdens upon us – double taxation, FATCA, FBARs – a mistake that overseas Americans are paying for every day.

In October 2024 President Trump heard their appeals. During his campaign for the Presidency, he made this promise:

“[O]nce and for all I’m going to end double taxation on our overseas citizens. You’ve been wanting this for years and no one has listened to you. And you deserve it. And I’m going to do it. It’s the right thing to do. And no American leader has ever been willing to stand up and commit to you the way that I have.”

Responding to President Trump’s promise, in December 2024, Representative Darin LaHood (R-IL) introduced H.R. 10468 – the Residence-Based Taxation for Americans Abroad Act. The bill would offer many overseas Americans relief. I understand that Representative LaHood will reintroduce the bill in the 119th Congress. I urge the members of the Committee on Ways & Means to offer their full, bipartisan support to LaHood’s bill.

RBT, please!

I also call upon Congress to come into alignment with every other developed nation on the planet and move to a full residence-based taxation system for individuals in the long-term. Americans who are tax residents of other countries would continue to be liable for U.S. federal income tax for any income that is effectively connected with the United States, as all non-resident aliens are, by using Form 1040-NR instead of Form 1040.

Thank you for your attention to this matter.

Living in hope,

Beth Hodge

P.S. [1] For more information about the U.S. extraterritorial tax system and the problems it creates for overseas

Americans, see, e.g., Laura Snyder, The Criminalization of the American Emigrant, 167 Tax Notes Fed. 2279

(June 29, 2020), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3655145.

[2] Donald J. Trump, I Will End Double Taxation..., YouTube (Oct. 12, 2024), at 0:22 to 0:41,

https://www.youtube.com/watch?v=LrQCFZHgQr0&t=25s.

[3] Other countries offer examples of how the United States can end its tax policies that discriminate against

Americans while also protecting against tax abuses by wealthy persons. See Laura Snyder, Extraterritorial

Taxation #15: Taxing in Respect of Rights, SEAT Working Paper Series #2023/15, at 7-11 (June 5, 2023),

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4466241.