Statement for the Senate Finance Committee record on the President’s fiscal year 2027 budget for the Department of the Treasury

We sent the letter below (without the AI-generated image) to Sen. Finance Committee Chairman Mike Crapo

The Honorable Mike Crapo

Chairman

Committee on Finance

United States Senate

219 Dirksen Senate Office Building

Washington, DC 20510

RE: April 15, 2026, Hearing – The President’s Fiscal Year 2027 Budget for the Department of the Treasury

Dear Chairman Crapo and Members of the Committee,

Thank you for the opportunity to submit this statement for the record regarding the Committee’s June 4 hearing about the Treasury Department’s Fiscal Year 2027 budget priorities.

The Senate Finance Committee’s hearing notice invited individuals and organizations to submit written views for inclusion in the hearing record, which this statement offers on behalf of Americans abroad who continue to bear the burdens of citizenship-based taxation, overlapping foreign account reporting, and exclusion from normal financial life.

As the United States approaches the 250th anniversary of the Declaration of Independence, the country will rightly celebrate the promise that all people are entitled to “life, liberty and the pursuit of happiness.”

Freedom? We wish…

That national milestone should also prompt Congress and the Administration to confront a longstanding contradiction: more than 5 million Americans who live outside the United States remain subject to a heavy tax and reporting system that denies them ordinary financial freedom, a system that treats them as presumptive tax cheats rather than as citizens deserving equal dignity.

Americans abroad face duplicative, inconsistent, and punitive reporting obligations, including FBAR, FATCA, PFIC rules, and complex reporting, even for those with lifestyles and employment that would be commonplace in the United States. These demands increase dramatically for Americans who own businesses or have foreign pensions and trusts. The United States’ current worldwide tax system for Americans living and working abroad is often incompatible with systems in other countries and can impose life-altering penalties even when no U.S. tax is owed.

These are not abstract compliance irritants. They affect whether an American abroad can open or keep a bank account, save for retirement, serve as a signatory on a local community or employer account, plan for a non-U.S. spouse’s financial security, or invest normally in the country where that American actually lives.

Guilty until proven innocent

In practice, FATCA and FBAR often operate not as narrow anti-evasion tools for ordinary Americans overseas, but as a broad net of suspicion that makes normal family and economic life far harder than it should be.

The only other country that imposes similar strictures on its citizens is Eritrea.

The National Taxpayer Advocate has acknowledged that Americans abroad face extraordinary compliance burdens, high costs, and financial obstacles severe enough that some feel forced to renounce U.S. citizenship simply to live normal financial lives. Because of this injustice, as many as 50,000 American citizens by some estimates are currently waiting in line to renounce their U.S. citizenships—on top of the 50,000 who have already done so. When a government’s tax system pushes law-abiding citizens toward expatriation not because they reject their country, but because they can no longer maintain basic banking, retirement, and family financial stability, that system is denying them the freedom to pursue a normal life, let alone liberty and happiness.

The United States should not celebrate its 250th year asking loyal citizens abroad to choose between their citizenship and their ability to function economically in the countries where they live. Yet that is the practical choice many face today.

Double taxed

Americans abroad already pay taxes where they live, work, raise families, and use public services. The current U.S. system layers additional filing burdens, costly specialist to meet compliance requirements, and exposure to disproportionate penalties on top of those ordinary local obligations.

If “life, liberty and the pursuit of happiness” still means anything in federal policy, it must include the freedom of an American living abroad to hold a local bank account without fear, save for retirement without punitive complexity, marry and plan finances with a non-American spouse without collateral damage, and remain an American without being driven toward renunciation by an unworkable tax regime.

Rep. Darin LaHood has offered a way out with the Residence-Based Taxation for Americans Abroad Act, which is currently struggling to get the attention that it deserves. On the campaign trail, President Trump pledged to end the double taxation of Americans abroad. There is no better time to do it—and no other issue that unites Americans abroad as much as the universal agreement on the need for relief from the current system. Please make residence-based taxation a priority for Americans abroad.

Sincerely,

Brandon Mitchener

Executive Director, Tax Fairness for Americans Abroad