White House chief of staff Mark Meadows did in fact receive a letter sent to him last month by the Republicans Overseas that urged him to call on President Trump to use his presidential authority to issue an "executive order" aimed at fixing certain tax issues expat Americans are currently struggling with, and is "very interested in doing something to end double taxation [for expats] legislatively after the election", according to RO chief executive and vice president Solomon Yue.
However, Meadows made it known that using an executive order to adjust the taxation problems expat Americans face "30 days out before the election would be seen as being too political," Yue added.
Yue was summarizing a response to a question he put over the weekend to Richard ("Ric") Grenell, a former U.S. Ambassador to Germany who is currently serving as a special envoy to the ongoing Serbia and Kosovo peace negotiations. Grenell is a senior fellow of Carnegie Mellon University's Institute for Politics and Strategy, and, during his more than 10 years with the U.S. State Department, also served briefly as acting director of national intelligence.
Yue posed his question to Grenell on Saturday during a conference call for Republicans Overseas members, in connection with the organization's efforts to encourage expat Republicans to vote.
As reported, the Republicans Overseas addressed their Sept. 1 letter to Meadows in hopes of bringing the myriad-but-thus-far-undiscussed issues facing America's estimated 9 million expats into the realm of pre-election campaign discussion. Meadows is a Republican Party stalwart who is a well-known opponent of the 2010 law known as FATCA, which has made life extremely difficult for most Americans resident outside the U.S., and led to an explosion in the numbers of Americans renouncing their citizenships, even after the costs of doing so rose from nothing to US$2,350.
Until now, there had not been any official response to the RO's letter to Meadows.
Yue says he is in no doubt that Grenell is authorized to speak on behalf of Meadows in response to the letter.
Given that President Trump is still in Walter Reed Medical Center, where he is being treated for Covid-19, any hope that there might have been of getting him, or anyone else at the top of the Republican party, to address FATCA and other expat concerns before the election appears to be vanishingly slim, Yue added.
In their six-page letter – which was signed by 21 Republican Overseas officials, including Yue (pictured left), RO vice president and general counsel and Israel RO Chair Marc Zell; former RO legal counsel of Switzerland Ed Flaherty; and the regional RO chairs of 18 countries – the Republicans Overseas spelled out in detail how President Trump could use his presidential authority to fix many of the problems expats have been asking for for years, but which Congress has failed to address.
These included the issuing of executive orders that would "exempt overseas small businesses from having to comply with the Transition Tax and GILTI tax", which were contained in Trump's 2017 Tax Cuts and Jobs Act, as well as one that would "create a [presidential] commission on Americans overseas to investigate the burdens caused [to U.S. expats] by citizenship-based taxation and onerous regulation".
"America is one of only two nations that taxes its citizens based on citizenship (the other being Eritrea)", the letter notes at one point.
"This double taxation makes overseas Americans and overseas American businesses much less competitive than their foreign counterparts. Overseas American entrepreneurs face double business taxation due to their citizenship from which corporations are exempt."
With respect to FATCA specifically, the letter notes that it has "caused immeasurable harm to loyal American citizens residing abroad, as you [Meadows] learned during the landmark hearings that you organized as Chairman of the House Subcommittee on Government Operations in April 2017.
"Today, overseas Americans are not only seeing their lives embittered by FATCA, but as an unintended result of the President's Tax Cuts and Jobs Act of 2017, they find themselves subject to new taxes and an even more onerous set of compliance obligations."
The last three pages of the letter consist of two appendices that spell out how a "Draft executive order on Promoting the American Economy Abroad and Granting Relief to Overseas Americans" and "Ending Citizenship-Based Taxation Through Treasury Regulations" could be done.
The letter may be viewed in its entirety on the Republicans Overseas website by clicking here.
A few days after news of the RO's letter to Meadows broke, the Democrats Abroad rebutted the letter's key points, arguing that it did "not provide reasonable relief for Americans abroad," and indicating how the Democrats would go about addressing the same issues.
Among other points, the DA noted in its response, "digging into the details of the [Republican] document, one finds that the request does not actually extend to providing retroactive TCJA transition tax exemption to businesses registered or headquartered abroad", a reference to President Trump's Tax Cuts and Jobs Act of 2017, which, as this and other publications have reported, has caused significant problems for Americans abroad who own their own small businesses.
"The proposed relief would only apply to small businesses as defined in the Small Business Act (SBA) – those that are registered in the U.S., headquartered in the U.S. or operating primarily in the U.S."
What's more, the DA letter continues, "The draft executive order suspends FATCA for everyone, not just Americans abroad, which means that tax cheats will be given a pass to use offshore accounts to hide assessable income from the U.S."
- U.S. tax expert Goulder: Theory of 'strategic forbearance' could help explain EU reluctance to challenge U.S. over FATCA
- Dutch financial arbitration body says Aegon OK to close dual U.S./Dutch citizen's savings account
- Nat'l Taxpayer Advocate, in annual report: 'Harmonize reporting requirements for taxpayers subject to both FBARs and FATCA'
- Americans and 'accidentals' in Europe react, after EU's Gentiloni quoted saying FATCA not a bloc issue
- AXFNJ Podcast: Retired Dutch pilot Ariës discusses his recent court victory with John Richardson