Expat group claims IRS is targeting Americans living overseas

A Switzerland-based expat group representing American expats living overseas is claiming that the IRS is deliberately targeting US expats while ignoring its duties in the homeland.

American Citizens Abroad, a Geneva-based group, is taking full advantage of the ongoing congressional investigation into the IRS by accusing the authority of prejudicial dealings with expats living overseas. A four-page letter has been sent to the congressional committee and sub-committee members documenting the seriousness of the issue of recent tax amnesty schemes.

The 2009 Overseas Voluntary Disclosure Programme (ODVP), according to the letter, is prejudicial in the extreme to US expats wishing to be compliant. The letter points out that the scheme was roundly condemned by taxpayer consultants, the New York Bar Association and a number of prominent tax lawyers, but was introduced in spite of the objections.

ACA requests for a breakdown of those participating and their taxes owed and penalties imposed, made under the Freedom of Information Act, have been repeatedly ignored by IRS officials, an issue which deserves a congressional investigation. The letter explains that US resident tax evaders are completely different from expats living overseas, adding that the IRS scheme is a one-size-fits-all scheme which deliberately penalises US expats who joined in good faith.

The majority of US expats overseas are long-term residents and retirees, and keep most of their assets in their new countries with very little or any remaining in the US. Tax evaders living in the US are lkely to have between 10 and 20 per cent or more of their assets in offshore tax havens, but legitimate expats are subject to the same level of fines, leaving them trapped, disillusioned and discriminated against.