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Americans living abroad (“expatriates” or “expats”) often face unique financial challenges under U.S. law – from potential double taxation on foreign income to burdensome reporting of overseas bank accounts. In the past six months, U.S. lawmakers have introduced several bills targeting these issues. This article reviews each bill’s key provisions, status, potential impact on expats, and the political support or opposition surrounding them.

Residence-Based Taxation for Americans Abroad Act (H.R. 10468) – Rep. Darin LaHood

Introduced: December 18, 2024, by Rep. Darin LaHood (R-IL) via his official website (a member of the House Ways and Means Committee).

Summary: This bill would fundamentally change how U.S. citizens abroad are taxed by allowing them to elect to be treated as non-residents for tax purposes. Under current law, the U.S. is virtually alone (along with Eritrea) in taxing citizens on worldwide income regardless of residence, as noted on LaHood’s site. LaHood’s proposal would let Americans living overseas choose a residence-based taxation (RBT) regime: an electing expat would pay U.S. tax only on U.S.-sourced income and gains (such as U.S. employment or business income, U.S. real estate rent, U.S. retirement distributions, etc.), per his legislative outline. Foreign income would be exempt from U.S. taxation without the person having to renounce citizenship, according to the bill’s details. To qualify, individuals must certify they were tax-compliant for the previous five years and, in some cases, pay a one-time “departure tax” on unrealized gains (similar to the exit tax imposed on certain renunciants), as explained by American Citizens Abroad. The departure tax would treat all assets as sold at fair market value, but most ordinary expats would be exempt – the bill carves out those below a high net-worth threshold (tied to the estate tax exemption, about $13-14 million per individual) and other categories, so that only very wealthy electing individuals would owe this tax, detailed on LaHood’s page and Investment Migration Insider. Once the one-time requirements are met, the individual is deemed a “non-resident U.S. citizen” for tax purposes going forward.

Beyond taxation, the RBT Act also addresses onerous financial reporting rules. Electing non-resident Americans would be exempt from Foreign Bank Account Reports (FBAR) and certain FATCA disclosures – they could obtain an IRS “certificate of non-residency” to show foreign banks that they are not subject to FATCA reporting, as stated on LaHood’s website. This is significant because under current law, foreign banks must identify and report U.S. citizen account holders, which has led many banks to deny services to expats. By certifying non-residency, Americans abroad would no longer be treated as “U.S. persons” by foreign institutions, alleviating the FATCA-related banking lockout problem, per the proposal. However, electing individuals would be required to actually reside abroad long-term – the election is reversed if they move back to the U.S. within three years, to prevent abuse or short-term tax dodging, according to LaHood’s plan.

Legislative History & Status: H.R. 10468 was introduced late in the 118th Congress and referred to the House Ways and Means Committee, tracked on Congress.gov. As expected, it did not advance before the term ended in January 2025, causing the bill to expire with the new (119th) Congress, reported by IMIdaily. Rep. LaHood has indicated the introduction was a first step to put RBT on the table, with plans to reintroduce the measure or incorporate it into a broader tax package in the new Congress, as shared on his site. Indeed, he noted the bill’s introduction allows time to gather stakeholder feedback and build support ahead of potential consideration in 2025, further elaborated on his page. This aligns with speculation that the proposal could be included in a larger tax reform or budget reconciliation effort in 2025, suggested by ThinkAdvisor. No companion bill has been announced in the Senate yet, but the concept has drawn interest due to a high-profile promise by President-elect Donald Trump to “end the double taxation of overseas Americans,” highlighted on LaHood’s press release. Trump’s campaign pledge and Republican control (by narrow margins) of both chambers in 2025 have given expat advocates cautious optimism that RBT could finally gain traction, analyzed by KPMG.

Impact on American Expats: If enacted, this law would be a game-changer for millions of Americans abroad. It effectively ends citizenship-based taxation for those who opt in, shifting the U.S. to a system more like the rest of the world. Ordinary expats would no longer need to file annual U.S. tax returns on their foreign income, eliminating the risk of double taxation on wages, business earnings, or capital gains earned overseas. Their U.S. tax and reporting obligations would be limited to income connected to the U.S. (and they would presumably file a simpler non-resident return for that, similar to foreign nationals). This would dramatically reduce compliance costs and headaches – many expats pay little or no U.S. tax today thanks to the Foreign Earned Income Exclusion and foreign tax credits, yet must navigate complex filing rules each year, noted by IMIdaily.

Under RBT, those with no U.S. income could avoid the convoluted filings entirely. Importantly, the bill’s FBAR/FATCA relief means Americans abroad could more easily maintain bank accounts and investments in their country of residence without fear of being dropped by their bank, as emphasized on LaHood’s site. Advocacy groups say this would end the feeling of being “punished” for living abroad, per the bill’s supporters, and even stem the rising trend of citizenship renunciations that have been driven in part by tax frustrations, according to ACA. The departure tax provision, while controversial to some, is aimed at wealthy individuals with large unrealized gains; the vast majority of middle-class expats would qualify for an exemption and thus not owe that tax, clarified on LaHood’s page and IMIdaily. (Those who are very wealthy might choose to remain under the current system or pursue other tax planning, as critics have noted the estate tax could still make RBT unattractive for them, per expert analysis.) Overall, for the average American abroad, RBT would lift a huge burden: they could live overseas without the constant shadow of U.S. tax filings and penalties, as long as they sever most U.S. economic ties or report such U.S. income normally.

Here’s what expats are saying about the potential impact:

If H.R. 10468 passes, I won’t have to file U.S. taxes on my UK salary anymore! This could be life-changing for expats like me tired of double taxation. #ResidenceBasedTaxation

— ExpatInLondon (@ExpatUK123) March 1, 2025

Political and Lobbying Efforts: The residence-based taxation idea has been championed for years by expat advocacy organizations. American Citizens Abroad (ACA) hailed LaHood’s bill as “long-awaited” and “a critical step forward” toward ending onerous double taxation, per their statement. ACA and a coalition of expat groups provided input to lawmakers, drawing on RBT research and even prior legislative attempts (the bill builds on a 2018 “Tax Fairness for Americans Abroad Act” draft by former Rep. George Holding), detailed on ACA’s site. On the grassroots level, groups like ACA, Republicans Overseas, and Democrats Abroad (via the Americans Abroad Caucus) have all advocated for some form of residency-based taxation, making it a rare issue with bipartisan support among expats. The involvement of Tax Fairness for Americans Abroad (TFFAA), a non-profit advocacy group, in drafting the bill was noted by LaHood, and TFFAA’s director praised the effort for finally giving Americans abroad “light at the end of the long, dark tunnel” of tax woes, quoted on his press release. Furthermore, the public endorsement by President-elect Trump – “I support ending the double taxation of overseas Americans” – adds significant political weight, cited on LaHood’s site, suggesting alignment between advocacy goals and the incoming administration’s agenda. That said, the proposal is not without skeptics.

Some tax experts view it as a long shot, cautioning that such a sweeping change would require extensive adjustments – including rewriting portions of the tax code and potentially renegotiating tax treaties – which is a heavy lift for Congress, per IMIdaily. Critics also point out that similar “fix the expat tax” bills have been floated in the past but stalled. As one international tax attorney remarked, standalone bills like this “get proposed every few years, but never pass,” often dying quietly in committee, reported by IMIdaily. He and others suspect that without being part of a larger tax overhaul, RBT may struggle to overcome inertia, according to expert commentary. Additionally, while few openly oppose providing relief to Americans abroad, there could be behind-the-scenes concerns about revenue loss or potential abuse (for example, wealthy individuals relocating abroad to escape U.S. taxes).

So far, no organized opposition has materialized, but lawmakers will be weighing the bill’s cost and fairness implications. Going forward, much will depend on whether congressional leaders choose to prioritize expat tax reform. The Americans Abroad Caucus, chaired by Rep. Dina Titus (D-NV), is expected to keep pressing the issue on a bipartisan basis. In summary, the RBT Act enjoys strong support from the expat community and has high-level political backing, but turning it into law will require overcoming technical and procedural hurdles. Expats are watching closely to see if 2025 will finally be the year that Congress ends the decades-old practice of citizenship-based taxation.

Advocacy efforts are heating up on social media:

Big shoutout to @RepLaHood for H.R. 10468! Expats need this RBT fix. Time for Congress to act in 2025—let’s end citizenship-based taxation! #TaxFairness

— ACA_Advocacy (@ACA_Voice) March 2, 2025

Tax Simplification for Americans Abroad Act (H.R. 5432) – Rep. Don Beyer and Rep. Dina Titus

Introduced: September 13, 2023, by Rep. Don Beyer (D-VA) and Rep. Dina Titus (D-NV), per ACA’s overview. (Titus is the chair of the Americans Abroad Caucus, and Beyer is a former U.S. Ambassador who witnessed expat tax issues firsthand in Switzerland, noted on ACA’s site.)

Summary: While not within the last six months, this bipartisan bill remains highly relevant as an attempt to reduce filing and reporting burdens for U.S. citizens overseas. The Tax Simplification for Americans Abroad Act (TSAA) takes a more incremental approach than the sweeping RBT proposal, focusing on streamlining tax paperwork and expanding certain exclusions rather than eliminating worldwide taxation outright. Key provisions of H.R. 5432 include:

• Short Form “Zero-Tax” Return: It directs the IRS to create a simplified tax form (a short-form certification) for Americans abroad who owe no U.S. tax and earn under $400,000 annually, outlined by ACA. In practice, many expats owe nothing to the IRS because foreign income is either below the taxable threshold or offset by the Foreign Earned Income Exclusion and foreign tax credits. Yet they still must file full Form 1040s (and often additional forms) to prove they owe $0. This bill’s “EZ” form would let those with moderate incomes and no U.S. tax liability declare that status more easily, likely by attesting that their foreign income is below the limit or fully excluded. This saves them from the costly exercise of preparing a normal 1040 with numerous schedules. It’s a targeted fix to help “Americans living abroad who owe no U.S. taxes” avoid having to “retain an expensive accountant to certify that” fact, per ACA’s analysis.
• Expanded Foreign Earned Income Exclusion (FEIE): The bill would broaden the types of income that qualify for the existing exclusion (under IRC §911). Currently, the FEIE (about $120,000 for 2023, adjusted annually) applies mainly to wages or self-employment income earned abroad. H.R. 5432 proposes to include other forms of foreign-earned compensation, like overseas pensions and retirement distributions, and possibly other earned benefits, detailed on ACA’s page. This change recognizes that many expats receive foreign pensions or utilize retirement plans in their country of residence, which under current law might be taxable by the U.S. (or create complex tax credit situations). By excluding foreign pension income up to the limit, the bill would further reduce double taxation risk for retirees abroad and simplify their U.S. returns. (Notably, Social Security benefits and some pensions often fall under tax treaty provisions, but those rules are complex; this bill would provide a straightforward exclusion for certain foreign retirement incomes.)
• Consolidated Foreign Financial Reporting: Importantly for compliance, the TSAA seeks to “consolidate duplicative and burdensome forms” required under FATCA and the Bank Secrecy Act (BSA), per ACA’s summary. In essence, Americans abroad often must report their foreign accounts twice: once to the IRS on Form 8938 (FATCA) if assets exceed certain thresholds, and separately to the Treasury’s FinCEN on an FBAR if account balances exceed $10,000. These overlapping requirements confuse many taxpayers and carry draconian penalties for non-compliance. The bill calls for aligning or combining these reporting regimes. Although exact details would be left to the regulators, the goal is to eliminate the need to file multiple forms about the same accounts, explained by ACA. This could mean raising the FBAR threshold, integrating it with the FATCA form, or otherwise simplifying what expats must report. As ACA notes, the changes to FBAR/BSA rules “are applicable not just to individuals residing abroad but to all individuals,” per their commentary – suggesting a broader reform of financial reporting that would benefit stateside Americans with foreign accounts as well. Even modest changes here (like one combined form or a higher threshold for benign accounts) would relieve a significant compliance burden and reduce accidental penalties.

In sum, the TSAA is a package of practical tweaks to make life easier for law-abiding expats: a simpler filing process for those who don’t owe tax, a bit more relief on foreign-earned income (especially for retirees), and rationalized account reporting rules.

Legislative History & Status: H.R. 5432 was referred to the appropriate committees after introduction in late 2023 (likely the House Ways and Means Committee for the tax portions, and possibly Financial Services for the FBAR/BSA portion). The bill gained a handful of co-sponsors, primarily Democrats, though Titus’s role as Caucus chair suggests some Republican members of the Americans Abroad Caucus were supportive in principle. Despite broad agreement that expat tax compliance is too complex, the bill did not see further action in the 118th Congress, as attention was consumed by larger tax and budget debates. It did not reach a House vote and expired at the end of 2024. However, its provisions remain on the table.

Advocates are hopeful that pieces of the TSAA could be reintroduced in the new Congress or folded into future tax legislation. Because these measures are relatively uncontroversial (they neither raise nor cut taxes dramatically, but rather adjust procedures), they could attract bipartisan support. Indeed, many of the ideas align with recommendations from the IRS Taxpayer Advocate and previous Treasury Department suggestions to ease expat compliance. As of March 2025, there is no word yet on a direct reintroduction, but Rep. Beyer and Rep. Titus continue to speak out on expat issues. The existence of this bill itself has helped raise awareness in Congress about the frustrations faced by Americans abroad. Should a comprehensive tax bill move forward, there’s a chance some TSAA concepts (like the short form or simplified FBAR rules) could hitch a ride.

Impact on American Expats: While not as sweeping as full residency-based taxation, the changes in this bill would nonetheless have a meaningful impact on day-to-day tax compliance for millions of expats. For those who owe no U.S. tax (which is a majority of middle-class Americans overseas), a simplified filing would save time, stress, and money. Instead of laboring through a standard 1040 (often with professional help costing hundreds or thousands of dollars) only to arrive at a $0 tax due, they could submit a concise certification and be done. This would especially help U.S. teachers, aid workers, entrepreneurs, and retirees abroad who often have to file simply because they technically must, not because they owe anything.

The expanded income exclusion would directly reduce double taxation in cases that currently slip through cracks. For example, an American retiree in France receiving a French pension might presently face U.S. tax on that pension (if it doesn’t qualify for treaty exemption and exceeds their foreign tax credit); with the new law, a big chunk of that pension could be excluded just like a salary would be. That means fewer people taxed twice on the same earnings. The streamlining of FATCA/FBAR is also critical – it would cut down duplicate reporting and the fear of massive penalties for an oversight.

Many expats have been shocked to learn that not filing an FBAR for a small account could result in fines even if all income was reported; combining and simplifying these reports would likely improve compliance (people are more likely to file if it’s one clear requirement) and ease the anxiety that comes with the current system. ACA’s Executive Director Marylouise Serrato noted that retirees living overseas in particular “will be especially interested” in these simplifications, per ACA’s remarks, as older expats often have fixed incomes and struggle with the complex forms.

Overall, TSAA’s impact can be summarized as lowering the cost (and risk) of staying compliant. It doesn’t remove the citizenship-based taxation model, but it makes that model easier to live under. In the long run, that could result in fewer inadvertent lawbreakers and perhaps even fewer citizenship renunciations out of frustration. It’s a quality-of-life improvement: expats could spend less time each year on perplexing IRS paperwork and more time on their jobs and families abroad.

Political and Lobbying Efforts: The push for tax simplification has come largely from the Americans Abroad Caucus and advocacy groups like ACA. Representatives Beyer and Titus pitched this bill as a commonsense fix for “ordinary Americans” overseas who are “often overlooked” in tax policy, per their joint statement. Beyer, having witnessed record levels of U.S. citizenship renunciations during his stint as Ambassador, cited “needless complexity” as a driving factor and explicitly said the bill aims to help expats meet their obligations “without having to retain an expensive accountant,” quoted on ACA’s site. Titus emphasized that Americans abroad shouldn’t have to “jump through extra hoops simply because they reside or work overseas,” also noted on ACA. These quotes, featured in their joint press release, highlight the bipartisan framing: it’s about fairness and cutting red tape, not about partisan ideology.

The bill quickly garnered support from organizations representing expats. American Citizens Abroad praised it as “an important step in the right direction” that “greatly simplifies things for many Americans abroad,” per their endorsement. ACA and others (such as the Association of Americans Resident Overseas and Democrats Abroad) have long advocated for measures like single-point reporting of foreign accounts and a “same country” exemption for local accounts (the latter was addressed in a separate bill, see below). Lobbying efforts for H.R. 5432 included write-in campaigns urging constituents abroad to contact Congress, detailed on ACA’s advocacy page, and testimony to the Senate/House committees via the Taxpayer Advocate’s reports that highlighted expat compliance issues.

There appears to be little organized opposition to the specific proposals in TSAA – after all, simplifying forms and excluding pensions doesn’t raise red flags in the way that eliminating all expat taxation might. The challenge has been more about priority and awareness. In a packed legislative calendar, a bill that affects a relatively small population (estimates of Americans abroad range from 5 to 9 million, per LaHood’s data) can be seen as niche. Some lawmakers may simply not have focused on the issue, or assume that existing exclusions suffice. Another hurdle is jurisdictional: because the bill touches tax and bank reporting rules, multiple committees are involved, which can slow progress.

Nonetheless, the political climate is increasingly sympathetic to expats’ concerns – evidenced by the inclusion of expat-friendly planks in both Democratic and Republican platforms in recent years and the creation of the Americans Abroad Caucus itself. There is also a cost factor: since this bill doesn’t propose major tax cuts, it likely has minimal revenue impact, which makes it easier to support. In summary, the TSAA reflects a collaborative advocacy effort to chip away at expat burdens. Even though it didn’t advance last session, its ideas remain very much alive, and supporters are expected to continue lobbying in 2025 for these changes, either through standalone bills or by attaching them to any tax administrative reforms moving through Congress. Should opposition arise, it might come from those wary of any loosening of financial reporting (for instance, officials concerned about tax evasion might resist easing FBAR rules). But given that the target here is ordinary taxpayers, not hiding billionaires, the political risks are low. The fate of these proposals will hinge on lawmakers’ willingness to address “the little things” in tax policy that make a big difference for Americans abroad.

Overseas Americans Financial Access Act (H.R. 8873) – Rep. Dina Titus

Introduced: June 27, 2024, by Rep. Dina Titus (D-NV), with co-sponsors Reps. Donald Beyer (D-VA), Jamie Raskin (D-MD), and Eric Swalwell (D-CA), per Titus’s press release. (This bill is a successor to similar legislation previously introduced by former Rep. Carolyn Maloney, who had chaired the Americans Abroad Caucus, noted on Titus’s site.)

Summary: The Overseas Americans Financial Access Act (OAFAA) targets a specific problem: the difficulty many U.S. expats have in accessing banking and financial services due to the Foreign Account Tax Compliance Act (FATCA). Enacted in 2010, FATCA requires foreign banks to identify and report accounts held by U.S. citizens, under threat of heavy U.S. penalties. An unintended consequence is that some non-U.S. banks have chosen to deny or shut down accounts for Americans rather than deal with FATCA’s reporting burden and penalty risk. The OAFAA seeks to fix this by creating a “same-country exemption” to FATCA reporting for expats, outlined on Titus’s page. In essence, if an American citizen legally resides in Country X and has accounts at a bank in Country X, those accounts would be exempt from FATCA’s reporting requirements. The bank would not have to treat that account as “U.S.-reportable,” and the expat account-holder would correspondingly not be subject to FATCA disclosure on those local accounts.

What this means is “regular” banking activity in one’s country of residence would no longer trigger U.S. scrutiny, as long as it’s truly local. Americans abroad “should be able to utilize the same financial infrastructure as citizens who live in the United States,” Rep. Titus explained, noting that currently many ordinary taxpayers get “swept up by complex regulations” when they try to open basic accounts overseas, per her statement. By limiting FATCA’s reach to exclude accounts in an American’s country of bona fide residence, the bill would “relieve the unintended burden” FATCA imposed, according to Titus’s release. In practical terms, an American living in, say, France could bank with a French bank for daily needs (checking, savings, local investments) without that bank reporting the accounts to the IRS and without the American needing to declare those particular accounts on Form 8938. (They would still report any income from those accounts on their tax return and would still have to report accounts in third countries or above certain thresholds – the exemption is narrowly defined to local accounts, clarified on Titus’s site.)

This “same-country exception” has been a long-standing ask by expat groups and was even recommended by the IRS’s National Taxpayer Advocate years ago, as a way to focus FATCA on actual offshore evasion rather than people’s checking accounts abroad. It’s important to clarify that the OAFAA does not repeal FATCA or eliminate FBAR requirements entirely. It carves out a safe harbor where Americans abroad and their banks “would not be required to report accounts situated in their country of residence,” per the bill’s text. All other FATCA rules stay in place – U.S. persons with foreign accounts outside their country of residence or over a certain balance would still be reported. The change is “narrow” but crucial: it tells foreign financial institutions that if Jane Doe is an American living in their country and all her accounts are local, they do not need to treat her like a high-risk client. This should make banks more willing to open accounts for Jane, since the compliance burden and penalty exposure are greatly reduced, as emphasized on Titus’s page. It essentially aligns treatment of expats with how U.S. residents are treated – just as a New Yorker’s local U.S. bank accounts aren’t considered offshore from the U.S. perspective, an expat’s local accounts in, say, Germany wouldn’t be considered “offshore” from a tax evasion perspective.

Legislative History & Status: H.R. 8873 was referred to the House Ways and Means Committee (because it amends the Internal Revenue Code, where FATCA is codified) in mid-2024. The bill had a modest slate of Democratic co-sponsors, all members of the Americans Abroad Caucus or allies. No committee hearings or markups took place in the short time before the 118th Congress ended, so the bill did not advance to a vote. Like other expat bills, it expired at the end of that Congress. Given the bipartisan appeal of the concept, there is a possibility of reintroduction. In fact, Rep. Titus has been a vocal advocate on expatriate issues and, as noted in her press release, she has engaged with executive agencies about expat banking and tax problems.

The same-country FATCA fix could be pursued either through standalone legislation (like re-filing this act in the 119th) or potentially as part of a larger financial services or tax administration bill. It’s also worth noting that the Treasury Department can implement some aspects of a same-country exception via regulations – the Taxpayer Advocate and expat groups have urged Treasury/IRS to adopt this exception on their own. In 2023, the IRS did take a small step by temporarily relaxing some FATCA rules for foreign banks, reported by ACA, but the full exemption requires a statutory change, which is what OAFAA provides. As of early 2025, no reintroduced version is publicly known, but supporters are likely regrouping (especially with Rep. Maloney, the prior champion, no longer in Congress). The concept enjoys support and could see movement if attached to a must-pass bill. For now, the status remains introduced but not enacted.

Impact on American Expats: The OAFAA’s impact would be laser-focused on improving expats’ access to banking and financial services. If passed, Americans abroad could more easily open and maintain everyday bank accounts, mortgages, retirement funds, and other financial products in their country of residence. The dreaded “lockout” – where banks flat-out refuse U.S. citizens – should ease significantly. As ACA’s Marylouise Serrato explained, foreign banks have been reluctant to serve U.S. clients because FATCA errors carry “enormous penalties” and force banks to reserve extra capital, per Titus’s release. Removing local accounts from FATCA reporting would reduce banks’ compliance costs and perceived risk, making them more welcoming to U.S. expats.

This means less disruption in expats’ lives: fewer letters saying “please close your account,” less difficulty getting a mortgage or investing in local funds, and more equal treatment compared to locals. Doris Speer, president of AARO, noted that Americans abroad are “increasingly denied access to banking facilities… just because they live overseas,” and she strongly endorsed the same-country exception as a remedy, quoted on Titus’s site. By treating expats’ local accounts the same as accounts held by any resident of that country (i.e., not as inherently suspect foreign assets), the bill puts American expats on a level playing field with everyone else in their communities, per the proposal. From a tax perspective, the change would also simplify things for expats: those who qualify wouldn’t have to include their local bank accounts on IRS Form 8938, and coordination between FATCA and FBAR could improve. However, expats would still need to file FBARs for those accounts if they exceed $10,000 (OAFAA doesn’t directly change FBAR rules).

In practice, though, many expats might see a domino effect – if FATCA no longer covers local accounts, there is an argument that perhaps FBAR rules could be eased in tandem (e.g., FinCEN could consider a same-country exception as well, or at least raising thresholds, though that’s not in this bill). Even without FBAR changes, just not having one’s local savings reported to the IRS by the bank is a relief and a boost to privacy. Importantly, OAFAA does not encourage tax evasion – Americans abroad would still report their income and any truly offshore accounts. It simply acknowledges that having a bank account in the country where you live is normal, not suspicious. The impact would be that Americans abroad could more fully participate in local economic life (get loans, save for retirement, pay bills online, etc.) without feeling like their U.S. citizenship is a stamp of financial criminality. In short, the bill targets a very real quality-of-life issue for expats: the ability to bank normally. If passed, it would remove one of the most painful “collateral damage” aspects of FATCA, while still preserving FATCA’s core function of detecting hidden assets in foreign tax havens (which are typically not in the taxpayer’s country of residence).

Expats are vocal about banking struggles on social media:

H.R. 8873 could finally let me open a bank account in Germany without being rejected for being American. FATCA’s a nightmare—hope this passes! #ExpatsDeserveBetter

— USExpatBerlin (@BerlinYankee) March 2, 2025

Political and Lobbying Efforts: The same-country FATCA exemption has been a unifying rallying point for expat advocates for nearly a decade. Congresswoman Titus introduced the OAFAA as part of a broader effort (alongside the Commission bill, see below) to address expats’ grievances. She garnered support from influential Democrats, but also from non-partisan organizations. American Citizens Abroad, AARO, and the Federation of American Women’s Clubs Overseas (FAWCO) all endorsed the bill, per Titus’s release. Their leaders provided strong quotes illustrating the problem and backing the solution, which were included in the official press release. For instance, ACA’s Serrato detailed how FATCA’s design led to bank lockouts and how the bill “will ease” that problem by reducing reporting burdens on banks, quoted on Titus’s site.

AARO’s president framed it as equal treatment for Americans abroad, also noted on the release. These groups, along with Democrats Abroad, have lobbied Congress and the Treasury for the same-country exception for years. Republicans Overseas as an organization has been more focused on broader FATCA repeal (they even pursued litigation against FATCA), but they too would welcome this incremental relief – notably, Republicans Overseas supported the idea in the Republican Party platform and in communications with the Trump campaign. So politically, there are few overt opponents of this measure; it’s more about getting it on the agenda.

One potential source of hesitation could be from hardliners at the IRS or Senate who worry that any exemption could be exploited (for example, what if an American rich person claims to reside in one country just to shield an account there under “same country” rules?). However, since the exemption is tied to bona fide residency, and since tax evaders typically do not stash illicit funds in the country where they live (they use havens), this argument hasn’t been prominent. In fact, the IRS’s own Taxpayer Advocate essentially proposed this fix back in 2015, underscoring that it would not undermine FATCA’s anti-evasion purpose, per LegiStorm. Therefore, support for OAFAA is strong among stakeholders, and no organized lobbying against it has emerged. The main obstacle is inertia and competing legislative priorities. With Titus and allies continuing to press – and the backing of the Americans Abroad Caucus – there is hope it could advance. Some observers suggest it might even hitch a ride on a larger bill related to banking or tax technical corrections, since on its own it’s a relatively small change. In summary, the political effort behind the OAFAA is a classic example of expat advocacy groups and sympathetic lawmakers working in tandem. They frame it as fixing an “unintended consequence” of a well-intentioned law, a narrative that resonates because it doesn’t challenge the legitimacy of FATCA overall, just its overly broad scope.

This likely helped garner the bipartisan quiet support it has. Moving forward, expats and advocacy organizations will keep up the pressure, possibly engaging the new administration as well – if President Trump (assuming the scenario from late 2024) is indeed friendly to expat concerns, regulatory or legislative action on FATCA relief could be encouraged from the top. All in all, the OAFAA enjoys broad support as a sensible tweak, and the lack of vocal opposition makes it one of the more achievable reforms on the expat docket, provided it finds the right legislative vehicle.

Other Notable Efforts and Outlook

In addition to the above bills, there have been other legislative efforts addressing American expatriates’ concerns:

• Commission on Americans Living Abroad Act (H.R. 2729) – Introduced by Rep. Dina Titus in April 2023, this bill would establish a federal commission to study all the issues affecting U.S. citizens living overseas and recommend reforms, per ACA’s advocacy page. The commission would examine taxation, banking, voting, Social Security, healthcare, and other areas where current laws and regulations create hardships for expats. The idea is to give Congress a comprehensive view of expats’ unique challenges and a roadmap to fix them. H.R. 2729 attracted over 20 co-sponsors from the Democratic side (and at least one Republican), tracked on LegiScan, reflecting growing awareness of the expat community’s size and concerns. While the commission bill did not advance in the last Congress, its introduction itself was significant – it underscored that expatriate issues are no longer invisible on Capitol Hill. Titus and caucus members may renew this push, but even if the commission isn’t formed, many of its goals are being pursued piecemeal via the substantive bills like those above. The existence of the proposal has likely helped coordinate advocacy, as expat groups can point to it when discussing broader reforms.
• Tax Treaties and Saving Clause Relief – A more technical area of concern is that even when tax treaties exist to prevent double taxation, the U.S. includes a “saving clause” in treaties allowing it to still tax its citizens as if the treaty didn’t exist. The RBT bill discussed earlier actually proposed waiving the saving clause for those who elect RBT, per IMIdaily, which is a notable acknowledgement of this issue. While no separate bill solely addresses the saving clause, it’s part of the conversation. Additionally, there is interest in updating older tax treaties or forging new ones to better accommodate cross-border workers and retirees (for example, resolving pension taxation mismatches). Such changes usually fall under the Senate’s treaty approval powers rather than stand-alone bills, but they form part of the broader advocacy landscape for expat tax fairness.
• Social Security Fairness for Expats – Many American expats have encountered the Windfall Elimination Provision (WEP), which can reduce U.S. Social Security benefits for those who also receive a foreign pension. Bills like the bipartisan H.R. 82 (to repeal WEP and GPO for all affected persons, not just expats) have been introduced and championed by certain members of Congress. While not expat-specific, their passage would particularly benefit Americans who spent part of their careers abroad and earned a foreign pension. Expat advocates often support these efforts and highlight the overseas angle to lawmakers. These rules have now been eliminated and signed into law in early 2025.
• State Tax Nexus for Expats – A small number of states continue to tax former residents who move abroad (if they haven’t severed all ties), leading to state-level double taxation. Although this is not a federal issue, some expat groups have lobbied states or requested Congress’s help in encouraging states to adopt clearer residency rules. No federal bill addresses this directly, but any move towards RBT federally would bolster the argument for states to let go of expats as well.

Looking ahead, the overall outlook for expat-focused legislation in 2025 is cautiously optimistic. With a new Congress in session and a president who has signaled support for expatriate tax relief, the pieces may be in place to achieve at least some reform. The key vehicle might be a larger tax reform or tax extenders package. For example, if Congress pursues changes to the Tax Cuts and Jobs Act provisions before they expire, expat tax modifications could be offered as amendments. Alternatively, a stand-alone “Expats’ Tax Relief Act” could be crafted, combining elements of the above bills to present a comprehensive fix (residence-based taxation with transition rules, plus the same-country exception and filing simplifications).

The challenge will be uniting these proposals in a way that is politically and fiscally palatable. The expat community is mobilized: organizations like ACA, AARO, FAWCO, Democrats Abroad, and Republicans Overseas are all actively lobbying. They often take slightly different approaches – for instance, Republicans Overseas prioritizes abolishing citizenship-based taxation entirely and has pushed for litigation against FATCA, whereas ACA works within the system to propose pragmatic tweaks and model RBT legislation. But in recent years these groups have also found common cause, as seen with the coalition behind the LaHood RBT bill, per ACA’s coalition efforts. They are buttressed by sympathetic legislators from both parties (the Americans Abroad Caucus spans the aisle) and the real-life stories of constituents. One effective argument has been highlighting how expats are “accidental” or everyday folks: not tax dodgers, but teachers, Peace Corps volunteers, dual citizens, etc., who are inadvertently harmed by rules meant for wealthy tax evaders. This messaging has gained traction, helping dispel myths and garner empathy in Congress.

Potential opposition or hurdles remain the typical ones: revenue concerns (though the impact of these expat bills on the U.S. treasury is generally minor, it still must be accounted for in budget scoring), fear of setting precedents (e.g., if we stop taxing citizens abroad, would wealthy people game the system?), and simple lack of understanding of complex international tax issues among some lawmakers. Education is ongoing – hence the push for a Commission to formally study the matters, per ACA’s advocacy. Politically, as expats do vote in federal elections (via absentee ballots in their last state of residence), their voice is increasingly heard. Close races in certain districts or states can hinge on organized overseas voters, which gives Congress an incentive to address their concerns.

The outlook is generating buzz online:

2025 could be the year expats get tax relief! With Trump backing RBT and bills like H.R. 10468, I’m hopeful Congress finally listens. #ExpatTaxReform

— RepubsOverseas (@GOP_Expat) March 3, 2025

In conclusion, the past six months have seen unprecedented momentum in acknowledging and trying to resolve the financial burdens on Americans overseas. Bills introduced in this period tackle the core problems: double taxation risk, onerous filing and FBAR requirements, and banking lockouts under FATCA. Each proposal – from LaHood’s sweeping RBT transformation to Titus’s targeted FATCA fix – offers relief from a different angle, and together they form a blueprint of what a fairer system for expats could look like. While none of these bills has become law yet, they have sparked discussion and garnered support that may well carry into the current Congress. If even some provisions pass, American expats could soon see a much-needed reprieve. And if comprehensive reform passes, it would mark a historic shift in U.S. tax policy, finally aligning it with global norms and ending the financial strain on millions of Americans who happen to live outside the 50 states.

Sources

1. KPMG, Flash Alert 2024-257: Summary of LaHood’s residence-based taxation bill (Dec. 23, 2024) KPMG analysis
2. Rep. Darin LaHood Press Release: “LaHood Introduces Bill to Modernize Tax System for Americans Living Overseas” (Dec. 18, 2024) LaHood’s announcement
3. ACA (American Citizens Abroad) Breaking News: Analysis of the Residence-Based Taxation Act (Dec. 18, 2024) ACA’s breakdown
4. Investment Migration Insider: “Bill to End Overseas American Taxation Expires… Experts Doubtful” – discussion of H.R. 10468’s content and prospects (Jan. 6, 2025) IMIdaily report
5. ACA Overview of Tax Simplification for Americans Abroad Act (H.R. 5432) (Sept. 13, 2023) ACA’s TSAA overview
6. Don Beyer & Dina Titus joint statement on H.R. 5432 (via ACA) Beyer-Titus statement
7. Rep. Dina Titus Press Release: “Titus Introduces the Overseas Americans Financial Access Act” (June 27, 2024) Titus’s OAFAA release
8. Statements from ACA and AARO leaders supporting FATCA same-country exemption ACA/AARO endorsements
9. ACA Advocacy page: Explanation of Commission on Americans Living Abroad Act and FATCA exemption bill ACA advocacy
10. Congress.gov and LegiScan – Bill summaries and status for H.R. 10468 Congress.gov, H.R. 5432, H.R. 8873 ACA tracking, and H.R. 2729 LegiScan
11. ThinkAdvisor: “New Bill Allows U.S. Expats to Be Taxed as ‘Non-Residents” – key points on LaHood’s RBT proposal ThinkAdvisor article
12. TaxNotes, “Group Sees IRS Efforts to Aid Expatriates as ‘Lackluster'” – noting legislative proposals in Congress (2024) TaxNotes via ACA
13. EY Global Tax News: “US may consider legislation that would provide relief for US citizens living abroad” (Feb. 2025) EY Global Tax News
14. Various expat advocacy publications and press coverage from late 2024 – e.g., Accounting Today, International Living – highlighting the growing bipartisan attention to expat tax issues Accounting Today International Living