Tag Archives: ACA

Repeal of Foreign Earned Income Exclusion

7 Nov

Can you believe that there are those who want to repeal the Foreign Earned Income Exclusion? This has been the cornerstone of the legal way to avoid being taxed by two countries. Everyone agrees that it is not fair to be taxed twice on the same income.

Here’s what the ACA has to say about this issue. I do recommend that you join them (free membership) and get on their mailing list to stay up on issues that involve American Citizens Abroad, the Voice of Americans Overseas:


Foreign Earned Income Exclusion


Impending United States Tax Legislation that directly affect Americans outside the United States may be placing the Foreign Earned Income Exclusion (FEIE Section 911 of US Internal Revenue Code) that has assisted in minimizing the double taxation impact of working and living abroad for US citizens – against the competitive tax cost efficiency of living in the United States – up on the chopping block again. Revenues will need to be raised to offset these programs, and “it is currently thought by some members of Congress that elimination of Foreign Earned Income Exclusion would generate additional tax revenues”, according to the non-profit American Citizens Abroad Executive Director, Marylouise Serrato.


Ms. Serrato further stated in the ACA letter to the U.S. Super Committee of Twelve Lawmakers that eliminating the FEIE today would destroy the network of Americans representing US interests in areas such as the Middle East, Hong Kong and Singapore all fast growing markets, vital to the development of U.S. exports.


For full details see: www.aca.ch/joomla/images/pdfs/comm12.pdf


Congress must not repeat the mistake made in the late 1970’s when FEIE was eliminated with the Foreign Earned Income Act of 1978 (P.: 95-615).


I suppose that even if they do repeal this part of the tax code, one will be able to reduce one’s tax burden by deducting the taxes paid to the foreign country of residence from that amount which would be due the US. Is there any way to have your voice heard in this legislative discussion? Sure, you can write to a Congressperson, but not as your representative. You just don’t have a representative. This is again, an issue of taxation without representation.