Tax Simplification for Americans Abroad Act
This bill directs the Internal Revenue Service to make available a new tax form for certain U.S. citizens living abroad. The form shall allow such individuals to demonstrate nonresidence, and declare foreign income, foreign taxes paid, and U.S. source income from retirement, pension and social security benefits.
The bill also expands the types of income allowed as foreign earned income for purposes of the foreign earned income tax exclusion and sets forth requirements for reporting foreign financial assets.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5432 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 5432
To create a short form tax return to simplify the return process for
certain taxpayers living abroad, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 13, 2023
Mr. Beyer (for himself, Mr. Davis of Illinois, Mr. Trone, Mr. Nadler,
and Ms. Titus) introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Financial Services, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To create a short form tax return to simplify the return process for
certain taxpayers living abroad, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Simplification for Americans
Abroad Act''.
SEC. 2. SHORT FORM FOR CERTAIN TAXPAYERS LIVING ABROAD.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall make available a form for use by specified individuals
to file the return of tax imposed by chapter 1 of the Internal Revenue
Code of 1986. Such form shall replace Internal Revenue Service Forms
1040, 2555, 1116, 8938, 5471, 3520, 3520A, 8621, 8858, 8865, 926, 708,
FinCEN Form 114, and other forms for disclosing income, assets,
deductions, and offsets, and shall be as similar to Form 1040-EZ as it
existed in 2017, except that the form shall be sufficient to allow an
individual to, with respect to a taxable year--
(1) demonstrate that such individual is a qualified
individual under section 911(d)(1) of the Internal Revenue Code
of 1986,
(2) declare foreign income described in section 911 of such
Code,
(3) characterize income based on source, including--
(A) wages,
(B) self-employment income or business income,
(C) contract income,
(D) foreign government benefits,
(E) pension and other retirement income,
(F) scholarships and fellowship grants,
(G) interest,
(H) dividends, and
(I) capital gains,
(4) claim the standard deduction and, if applicable, the
child tax credit,
(5) declare foreign taxes paid or accrued, and
(6) declare United States source income from retirement,
pension and Social Security benefits to be treated as sourced
from treaty income where tax has been paid upon distribution.
(b) Specified Individual.--
(1) In general.--For purposes of this section, the term
``specified individual'' means, with respect to a taxable year,
an individual--
(A) who is a qualified individual under section
911(d)(1) of the Internal Revenue Code of 1986, and
(B) who declares--
(i) a gross income of not more than
$400,000, and
(ii) a tax liability of $0.
(2) Inflation adjustment.--In the case of any taxable year
beginning after 2024, the $400,000 amount in paragraph
(1)(B)(i) shall be increased by an amount equal to--
(A) such dollar amount, multiplied by
(B) the cost-of-living adjustment determined under
section 1(f)(3) of the Internal Revenue Code of 1986
for the calendar year in which the taxable year begins,
determined by substituting ``2023'' for ``2016'' in
subparagraph (A)(ii) thereof.
(c) Effective Date.--The form required by subsection (a) shall be
made available for taxable years beginning one year after the date of
the enactment of this Act.
SEC. 3. EXPANSION OF INCOME ALLOWED AS FOREIGN EARNED INCOME.
(a) In General.--Section 911 of the Internal Revenue Code of 1986
is amended--
(1) in subsection (b)(1)(B), by striking clause (i) and by
redesignating clauses (ii) through (iv) as clause (i) through
(iii), respectively,
(2) in subsection (b)(1)(A), by striking ``attributable to
services performed by such individual'' and inserting
``attributable to services performed by such individual or
benefits received by such individual'',
(3) in subsection (d)(2), by striking ``wages, salaries, or
professional fees'' and inserting ``wages, salaries,
professional fees, pensions, scholarships, fellowship grants,
distributions from retirement funds, or payments received by
the taxpayer with respect to disability, unemployment, family
medical leave, or childcare'', and
(4) in subsection (e)(2), by striking ``Except with the
consent of the Secretary, any taxpayer who makes such a
revocation for any taxable year may not make another election
under this section for any subsequent taxable year before the
6th taxable year after the taxable year for which such
revocation was made.''
(b) Effective Date.--The amendments made by subsection (a) shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 4. INFORMATION RELATING TO SPECIFIED FOREIGN FINANCIAL ASSETS.
(a) In General.--Section 5314 of title 31, United States Code, is
amended--
(1) by redesignating subsections (b) and (c) as subsections
(d) and (e), respectively; and
(2) by inserting after subsection (a) the following:
``(b) Specified Foreign Financial Assets.--
``(1) In general.--If a person makes a transaction that
would require reporting under subsection (a), and such
transaction involves a specified foreign financial asset, the
reporting requirements described in subsection (a) shall--
``(A) only apply if the transaction involves an
amount that exceeds the aggregate value threshold set
forth in section 6038D of the Internal Revenue Code of
1986; and
``(B) be satisfied by attaching to such person's
return of tax for such taxable year the information
required under section 6038D of the Internal Revenue
Code of 1986.
``(2) Specified foreign financial asset.--For purposes of
this section, the term `specified foreign financial asset' has
the meaning given the term in section 6038D(b) of the 2211
Internal Revenue Code of 1986.''.
(b) Information With Respect to Specified Foreign Financial
Assets.--Section 6038D of the Internal Revenue Code of 1986 is
amended--
(1) in subsection (b)--
(A) by striking ``For purposes of this section,''
and inserting ``Except as provided in paragraph (2),
for purposes of this section,'',
(B) in paragraph (2), by redesignating
subparagraphs (A), (B), and (C) as clauses (i), (ii),
and (iii), respectively,
(C) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively,
(D) by striking ``For purposes'' and inserting:
``(1) In general.--For purposes'', and
(E) by adding at the end the following new
paragraph:
``(2) Certain accounts exempt from financial reporting.--An
account is exempt from the reporting requirement under
subsection (a) if it is an account--
``(A) the maximum balance of which does not exceed
$600 for the entire duration of the taxable year,
``(B) the usage of which is limited to a single
merchant, or
``(C) the type of which is listed as an exempt
account in Annex II of the Foreign Account Tax
Compliance Act Intergovernmental Agreement in effect
between the United States and the country in which such
account is held.'',
(2) by redesignating subsections (f), (g), and (h) as
subsections (g), (h), and (i), respectively, and
(3) by inserting after subsection (e) the following new
subsection:
``(f) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year after
2024, the $50,000 amounts in subsection (a) and subsection (e)
shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2023' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--If any dollar amount increased under
paragraph (1) is not a multiple of $100, such dollar amount
shall be rounded to the nearest multiple of $100.''.
(c) Furnishment of Information by Foreign Financial Institutions to
Owners of Specified Foreign Financial Assets.--Section 1471(c) of such
Code is amended by adding at the end the following new paragraph:
``(4) Requirement to provide information to account
holders.--If a foreign financial institution submits a report
under this section, such institution shall provide account
holders with a copy of such report within 15 days of such
submission.''.
(d) Disclosure of Specified Foreign Financial Assets to the
Financial Crimes Enforcement Network.--Section 6103(l) of such Code is
amended by adding at the end the following new paragraph:
``(23) Disclosure of specified foreign financial assets to
the financial crimes enforcement network.--The Secretary may,
upon written request, furnish to the proper officers and
employees of the Financial Crimes Enforcement Network such
return information with respect to specified foreign financial
assets as is attached to tax returns pursuant to section 6038D,
but only to the extent necessary in investigating suspected
money laundering or the financing of terrorism.''.
(e) Effective Date.--
(1) The amendments made by subsection (a) shall apply to
reports filed with respect to calendar years beginning after
the date of the enactment of this Act.
(2) The amendments made by subsections (b), (c), and (d)
shall apply to returns filed with respect to taxable years
beginning after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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