Bright!Tax CEO Katelynn Minott Responds to Trump’s Proposal to Eliminate Double Taxation for Americans Abroad
Bright!Tax, an award-winning U.S. expat tax services firm founded by American taxpayers living abroad, has addressed the recent attention on the issue of double taxation following presidential candidate Donald Trump’s proposal to eliminate taxes for Americans abroad. The firm emphasizes that double taxation is rarely the primary challenge for the majority of U.S. expats and urges policymakers to focus on the broader complexities of the U.S. tax system that affect millions of Americans living overseas.
“While we appreciate initiatives aimed at alleviating financial burdens on U.S. expats, the proposal to eliminate double taxation does not address the core issue,” said Katelynn Minott, CPA, CEO of Bright!Tax. “For most Americans abroad, the real challenge lies in the cumbersome and complex process of filing annual tax returns to utilize existing provisions that already prevent double taxation.”
Katelynn Minott has been a thought leader in expat taxation for over a decade. Under her leadership, Bright!Tax has assisted more than 20,000 of the estimated 9 million Americans living abroad. Notably, over 80% of Bright!Tax clients do not owe any tax to the IRS because of mechanisms like the Foreign Earned Income Exclusion (FEIE), Foreign Tax Credit (FTC), and tax treaties. Even if they owe no taxes, these individuals still must file U.S. tax returns annually.
Complex Filing and Reporting Requirements Pose Greater Burden
In addition to income tax returns, U.S. expats face numerous additional reporting requirements regarding foreign accounts, assets, and businesses. Regulations such as the Foreign Account Tax Compliance Act (FATCA) and the obligation to file the Report of Foreign Bank and Financial Accounts (FBAR) significantly increase the compliance burden for everyday taxpayers.
“The extensive reporting obligations are overwhelming for most taxpayers abroad,” Minott explained. “These policies, intended to prevent tax evasion by catching white-collar criminals hiding assets outside the U.S., inadvertently make financial wellbeing challenging for compliant, law-abiding citizens.”
Double Taxation Affects Specific Groups
While double taxation is not the primary issue for most U.S. expats, it significantly impacts specific groups such as business owners and investors overseas. Provisions like the Global Intangible Low-Taxed Income (GILTI), effective since 2018, and the Passive Foreign Investment Company (PFIC) reporting requirements for pooled fund investors have created unintended tax consequences for these individuals.
“Business owners and investors are facing true double taxation under current laws,” noted Minott. “Comprehensive reform should address these complexities to ensure fairness across all segments of the expat community.”
Bright!Tax also highlights the intense discrimination U.S. expats face concerning access to banking services both in the U.S. and abroad. Financial institutions, wary of the costly reporting requirements imposed by FATCA, often choose not to work with clients who have multinational circumstances.
“Banks are increasingly shutting their doors to U.S. taxpayers because of the onerous reporting burdens,” Minott said. “This leaves many Americans abroad without essential financial services, further complicating their lives.”
Call for Holistic Tax Reform
Bright!Tax advocates for a holistic approach to tax reform that considers not only the elimination of double taxation for specific groups but also addresses the overall complexity and compliance challenges faced by the broader expat population.
“Meaningful change requires more than targeting double taxation,” Minott concluded. “Policymakers should focus on simplifying the tax filing process and easing reporting obligations to truly support the millions of Americans who live and work abroad.”
