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Groups Call for Equal Coronavirus Relief for Americans Abroad

Posted on Mar. 25, 2020

Two advocacy groups are pushing the U.S. government to extend tax relief under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to include U.S. citizens living abroad.

In a March 24 letter to members of Congress, Treasury, and the IRS — including Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, R-Ky., and House Speaker Nancy Pelosi, D-Calif. — American Citizens Abroad Inc. (ACA) and its sister organization, American Citizens Abroad Global Foundation, outlined several areas they said require attention. 

The CARES Act, which was introduced March 19 by McConnell, is the third in a series of relief packages introduced recently by lawmakers to help Americans deal with the economic and health crises brought on by the coronavirus. Under the bill, U.S. taxpayers would receive a recovery rebate check in an amount based on their 2018 tax returns. Amounts would vary, depending on a taxpayer’s filing status and income.

The organizations called on the government to ensure that the mechanics of the 2020 recovery rebates announced in the CARES Act are in place, saying relief payments made electronically are preferable to checks. “Mailing checks to Americans living in places like Greece or Turkey or Ghana would be a nightmare. The mail is slow, and things get lost. Paper documents traveling through the postal system in the midst of a pandemic is not a good idea,” ACA Executive Director Marylouise Serrato told Tax Notes in a March 24 email. 

ACA offered assistance through its work with the State Department Federal Credit Union (SDFCU). “This account is perfect for emergencies like this. SDFCU is a highly regarded U.S.-based institution and . . . makes it easy for account holders to transfer funds to an individual’s local foreign bank, or make transfers immediately to relatives in the U.S., or do all manner of other things,” Glen Frost, ACA associate legal counsel, said in a March 24 releaseAlthough it is not the only option available, it is one that the government should keep in mind, the letter says.

ACA also advised drafters of the CARES provisions not to base the amount of a refund or credit on a taxpayer’s tax liability because that would lower the amount received by most Americans abroad. “Americans abroad, looking at the entire population, frequently do not pay a great deal of U.S. tax. This is because they pay high taxes elsewhere and credit those taxes against their U.S. tax liability. If rebates or other forms of payments are tied to tax liability instead of, say, adjusted taxable income, Americans abroad might receive little or no monies. This is simply not fair, because these individuals are as much U.S. taxpayers as anyone else,” Serrato said.

The groups' other recommendations include taking into account different tax filing deadlines; ensuring that electronic filing goes smoothly, especially for those who obtain professional tax return preparation services; and providing loans to small businesses owned by U.S. citizens living abroad.

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