“I actively discourage them from opening certain accounts or even starting businesses because of the potential U.S. tax compliance consequences.”
— Roy, a U.S. citizen currently living in France
Dear Congress,
U.S. tax compliance abroad has made ordinary family life increasingly expensive and complicated for us in France. After more than 30 years here, routine decisions such as buying property, starting a business, and helping our children begin their financial lives can create costly U.S. reporting requirements, even though we already pay taxes where we live.
I was born and raised in the United States and was recruited to France more than 30 years ago for a technology job with a large international company. I met my French wife through the company, we married and started a family here. I still have lots of family in the United States, and we are considering moving back to the U.S. for retirement.
Remaining U.S. tax compliant over the years has created a significant financial burden, especially as our middle-class family has accumulated assets and tried to succeed in normal life. France is already a heavily taxed country, so I generally do not owe additional U.S. income tax. The problem is the complexity and expense of filing.
A family property became a filing problem
One example is our SCI, a type of structure commonly used in France to hold real estate and help pass property on to children. We recently paid a U.S. tax attorney $5,000 for advice and were advised to dissolve the SCI because keeping it would require us to file Form 8865 at an estimated cost of about $2,500 every year. The property itself is not worth enough to justify that kind of annual compliance expense.
And that is only one example.
My wife started a business, and the U.S. filing requirements associated with that are also very expensive. Normal financial and entrepreneurial decisions become much more complicated when we have to consider not only French law and taxes but an entirely separate U.S. reporting system.
The burden reaches our children
Our children also have U.S. citizenship and are now beginning their careers and entering the working world outside the United States. They are starting to face the same burden. I actively discourage them from opening certain accounts or even starting businesses because of the potential U.S. tax compliance consequences.
That is not something I ever imagined having to tell my children.
We are proud to be American and visit our family in the United States frequently. I have even considered renouncing my U.S. citizenship because of these burdens, but that is not what I want. I simply want my family to be able to live a relatively normal middle-class life outside the United States without the financial burden and stress of tax rules that can make ordinary financial arrangements extraordinarily complicated.
Please pass residence-based taxation so Americans living abroad can remain connected to the United States without being penalized simply for building their lives elsewhere.
Sincerely,
Roy in France
