From U.S. civil servant to tax-code target

“After years of proudly supporting the mission of the U.S. government, it is profoundly demoralizing to be treated by my own country as a tax evader.”

— Christian, a former U.S. Department of Labor project manager who currently lives in Germany

Dear Congress,

I am writing to you as a proud dual German and American citizen who spent years dedicating my professional life to public service in the United States. My journey is rooted deeply in American soil: I grew up in the United States, attended the German International School Washington for high school and earned a bachelor’s degree in global affairs from George Mason University in Fairfax, Virginia.

Following my education, I entered federal service. From 2009 to 2012, I served as a program analyst and project manager at the U.S. Department of Labor, within the Employment and Training Administration’s Office of Trade Adjustment Assistance. In that role, I managed public resources and worked tirelessly to support my fellow citizens, helping American workers navigate difficult economic transitions and rebuild their livelihoods. I loved serving my country and took immense pride in the mission of the U.S. government.

But while I was working hard to support American workers, the political landscape shifted. In 2010, the HIRE Act was passed, bringing with it the Foreign Account Tax Compliance Act, or FATCA. What was marketed as a targeted crackdown on wealthy tax evaders hiding billions in offshore accounts quickly transformed into a draconian net that caught ordinary, hardworking citizens like me.

Years later, my life took a major turn when I had to return to Germany to take care of my late parents’ estate following their unexpected deaths. Navigating that profound personal loss was difficult enough on its own. However, trying to manage an inheritance, settle an estate and pick up the pieces of my family’s life under the shadow of the U.S. tax code made an already painful situation exponentially worse.

Paying thousands to prove I owe nothing

Today, living and working in Germany, the daily reality of this legislation remains an ongoing nightmare.

Because the United States enforces a system of citizenship-based taxation, I am treated like a financial criminal suspect simply for existing outside U.S. borders. I live, work and use infrastructure in Germany, and I pay my full share of taxes to the local government. Because of foreign tax credits, my regular income tax liability to the IRS is exactly $0. Yet, to prove this $0 liability, I am forced to pay thousands of euros out of my own pocket every year to specialized cross-border CPAs just to navigate the labyrinth of expat forms, FATCA and FBAR reporting.

The financial penalties of simply trying to build a life abroad are staggering. For instance, when I started my own small building protection business here in Germany, I was hit with a $1,600 U.S. self-employment tax bill — paying into the American Social Security system on top of the local taxes I was already paying to get my venture off the ground. The system actively penalizes entrepreneurship and self-reliance for Americans overseas.

The burden extends far beyond these exorbitant compliance costs and double taxation penalties. It is also an issue of systemic discrimination. Because of the severe penalties and crushing reporting mandates the U.S. places on foreign financial institutions, German banks regularly refuse to take on “U.S. persons.” Everyday life milestones — opening a basic checking account, obtaining a local mortgage, investing in a standard retirement plan or running a business — have been turned into a legal minefield. After years of proudly supporting the mission of the U.S. government, it is profoundly demoralizing to be treated by my own country as a tax evader.

The costs reach beyond Americans abroad

Lawmakers in Washington often dismiss this as a niche issue affecting only a wealthy elite living luxury lives overseas. But my background in global affairs and my time at the Department of Labor taught me that our economy is entirely interconnected. The current system does not just harm Americans abroad — it actively damages the economic interests of everyday Americans living at home.

It kills American jobs and exports. For U.S. companies to sell goods and services globally, they need Americans on the ground to navigate foreign markets and manage supply chains. The crushing tax and compliance liabilities associated with hiring an American worker overseas make us an administrative burden. Foreign companies simply hire Europeans or Canadians instead. When we lock Americans out of global roles, we lock U.S. businesses out of foreign markets, directly hurting manufacturing and service jobs back home.

It drains wealth through bureaucracy, not revenue. The thousands of dollars that I and millions of others pay annually do not go into the U.S. Treasury to fund domestic infrastructure, schools or veterans. Instead, the money goes to specialized foreign accountants and compliance attorneys. This represents American wealth around the world that is wasted on paperwork instead of being invested in the economy or used to buy American goods.

It forces citizens to renounce their allegiance. The current system is forcing ordinary, patriotic Americans to make an impossible choice between their life savings and their citizenship. When the tax code forces dedicated, educated and skilled citizens to cut ties with their homeland, the United States loses some of its greatest global ambassadors.

Fixing this is not a handout to Americans abroad. It is a common-sense economic upgrade. Congress must pass the Residence-Based Taxation for Americans Abroad Act. This legislation provides a balanced path forward, ensuring that U.S.-source income remains fully taxable while bringing fairness, simplicity and sanity to the tax code.

It is time to stop punishing everyday citizens overseas and align the United States with the rest of the global community.

Sincerely,
Christian O. Holz in Germany