A World Away, Still Taxed: The Alienating Reality of U.S. Expat Taxation

"I don't believe it’s fair—or sustainable—for people in my position to be caught in such a burdensome and punishing system."

-Hussnain Qamar Shah

Dear Congress,

I was born in the U.S., lived there until I was two, then moved to Canada for a few years before my family settled in Pakistan. I later returned to the U.S. for my undergraduate and master’s degrees, and I’m sincerely grateful for the time I spent there—building lasting friendships and learning from excellent American institutions. I also recognize the privilege that comes with holding a U.S. passport, especially in terms of mobility and access. But I haven’t been back in over a decade—and I have no financial ties to the U.S.

When I returned to Karachi in 2014, it took me over a month to open a bank account—something that should have been a straightforward task. I learned, after pestering the banks about the delays, that they weren’t due to inefficiency, but rather heightened caution they had to exercise in order to comply with IRS mandates requiring them to report accounts held by Americans. While this extra scrutiny was meant to safeguard compliance, it left me feeling both frustrated and alienated. What is a simple, everyday task for citizens of most other countries became a drawn-out, stressful ordeal for me as a U.S. citizen.

Later, I learned I was required to file U.S. taxes as an expat. I used TurboTax, thinking it would be straightforward and that I could meet all the necessary requirements. At the time, I had no idea just how complex and punitive the U.S. tax system could be for someone living and working abroad—especially given that I already pay taxes locally in Pakistan.

When I opened a small education business, I discovered Form 5471. It was incredibly complex—completely beyond what I could manage on my own. I first consulted with CPAs, but they were unfamiliar with the form and couldn’t offer much help. Afterward, I found accountants who could assist, but their fees—over $1,000 to file the form—felt exploitative, especially given my limited savings and teacher’s salary. With no other viable options, I ended up hiring an accountant, even though the cost was burdensome. The stress and financial toll were immense. I also found horror stories online about automatic $10,000 penalties for missing the form—anunthinkable amount for me—so my worries weren’t even about the actual tax owed; they were about avoiding a filing mistake that could ruin me financially.

I became consumed with trying to get it right. I’d read that the form had to be “substantially correct,” or you could still face penalties. I spent months agonizing over the smallest details—trying to decode timelines, reconcile accounts, and match reporting periods. Each answer led to more confusion, and every clarification felt like a new layer of uncertainty. It was a Nightmare.

Because of how complex and punishing the reporting requirements are, I avoid things like opening a joint account with my wife or making basic investments—ordinary financial steps that most people take for granted. I’m not a wealthy person; I just want to make responsible financial choices without getting punished for them. But each step—no matter how routine it may seem—requires careful consideration of how it might trigger reporting obligations or penalties.

The fear of making a mistake or overlooking some detail makes even simple decisions feel risky.

I don’t have the time or resources to constantly hire experts to help me navigate two complex, misaligned tax systems, and that only adds to the burden.

Clearly, these tax laws were not designed with people like me in mind—low-to-middle income earners living in developing countries with no U.S. income or assets. Yet we’re held to the same rules as multinational executives. I say this with gratitude for what the U.S. has given me: a great education, friendships I still cherish, and opportunities I couldn’t have accessed otherwise.

But I don't believe it’s fair—or sustainable—for people in my position to be caught in such a burdensome and punishing system. Congress must end citizenship-based taxation for expats like myself, who have no meaningful financial ties to the U.S. and are simply trying to live our lives responsibly abroad.

Sincerely,

Hussnain Qamar Shah