An American in Japan asks for relief from an unjust and outdated system

“This will cost me hundreds of thousands of dollars over my lifetime. All because of a tax system that treats me as if I am attempting to evade obligations, when in fact I am simply trying to live an ordinary life in the country where I actually reside.”

-- Yannick in Japan

Dear Members of Congress,

My name is Yannick, and I live in Japan. I was born in France to an American parent, and though I have never lived in the United States, I carry U.S. citizenship.

For years, I had no idea that this distant connection to a country where I have never resided would come with lifelong obligations and penalties. Six years ago, I discovered that I was expected to file U.S. tax returns, and I had no choice but to spend thousands of dollars on accountants to navigate the Streamlined Filing system.

Exercise in futility

Since then, I have spent even more each year on professional fees, only to file paperwork that almost always shows I owe nothing to the United States. It is an exercise in futility that drains my savings, my time, and my peace of mind.

What makes this burden even heavier are the rules surrounding investments. The complex and punitive treatment of so-called PFICs means that as an American abroad, I cannot participate in the retirement and savings programs of my country of residence. I was forced to divest from my iDeCo pension plan and from Japan’s NISA savings scheme, even though they were designed to help people build security for their futures. This will cost me hundreds of thousands of dollars over my lifetime. All because of a tax system that treats me as if I am attempting to evade obligations, when in fact I am simply trying to live an ordinary life in the country where I actually reside.

Taxation without representation

I am not unique. More than 5 million Americans across the world live under these same conditions. Many of us do not have the right to vote in the United States, yet we are still subject to citizenship-based taxation, a policy that no other developed country enforces. Only Eritrea shares this practice with America. The result is not just financial strain but also social isolation, as banks and financial institutions often refuse to deal with us once they learn of our U.S. citizenship. Some feel forced to make the painful choice of renouncing their citizenship in order to lead normal lives.

This situation is not sustainable, nor is it just. What we need is a fair, internationally recognized standard: Residence-Based Taxation. Such a system would allow Americans abroad to pay taxes where they live and work, as nearly every other country requires, while still remaining connected to their country of citizenship without punishment.

End double taxation

There is already a path forward. Representative Darin LaHood’s proposed legislation, The Residence-Based Taxation for Americans Abroad Act, offers a balanced and pragmatic solution. It would finally bring the United States in line with global norms and fulfill the promise once made by President Trump to end the double taxation of Americans abroad.

I appeal to your conscience and to your sense of responsibility. Please recognize the injustice in continuing this outdated system, and give Americans like me the chance to live without fear of financial ruin or administrative exile. Support residence-based taxation, and let us reclaim a fair and dignified relationship with the country we are tied to by birth or by heritage.

Sincerely,

Yannick in Japan