Potential Bad News for Offshore Expats

Phaedrus · May 14, 2003

The US Sente Finance Committee wants to eliminate the section 911 exclusion on inome taxes, which allows US citizens to enjoy exemption on foreing-earned income up to $ 80k a year.

Story here.

Gotta love your Uncle Sam. The only industrialised country in the world that taxes foreign-source income to start with, now eliminating a tax break that means the most to the people doing the most good for the American economy overseas -- offshore oil workers, international doctors and consultants, educators, etc.

Phaedrus

Dante · May 14, 2003

thanks for the info Phaedrus...man they will not leave us alone...

Fishhead · May 14, 2003

May be time to move to Costa Rica or Uragary.

assassin · May 14, 2003

Looks like bad news for my buddy's working in Japan. Just sent them the link.

Thanks for the good work.

WildBill · May 14, 2003

I have heard this one is a result of a lot of really bad info. Some zealot has been whispering to these guys that almost all foreign based employees are making hundreds of thousands of dollars and not reporting it or undererporting so they magically make the threshold.

Bottom line is that the IRS is just at the mercy of people reporting on this, there is no way for them to confirm your earnings in many countries. Further its likely there will be carve outs on this one where income that is from a country they recognize as having effective tax systems that there will be a lot of credit offsets based on the taxes you pay. What the rationale for this is that people are going overseas and living and not reporting anything in income. When pressed the people say that they were working, but not making the 80k so they didn't file. The IRS has no clue if its true or not, they don't have the rights of subpoena like they do in the US so they can't investigate. By doing it this way they are foolishly hoping they can track this better.