American Citizens Abroad (ACA) Presents Evidence of Alleged IRS Abuse to Congressional Panel

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American Citizens Abroad (ACA) has written to Congressional officials to present evidence of what the organization considers as IRS abuse in the administration of the Overseas Voluntary Disclosure Program for Americans living outside of the United States.

In the wake of the latest IRS controversy, American Citizens Abroad (ACA), the voice of Americans living and working overseas, presented evidence of alleged unfair targeting by the IRS of U.S. citizens living abroad, in a letter to Congressional officials investigating the agency.

The ACA letter highlights the impact of the IRS administration of the 2009 Overseas Voluntary Disclosure Program (OVDP) that ACA considers was extremely prejudicial to Americans living overseas who sought to become compliant with their U.S. tax status. U.S. citizens living abroad who entered the OVDP believed they could come into compliance by simply filing the appropriate paperwork and paying any outstanding tax burden, but many of these individuals, who provided ACA with testimonials, were later told by the IRS that they would be hit with a standard penalty of 20% of the highest value of their bank accounts over a five-year period.

“There is no question that the IRS targeted Americans living overseas,” said ACA Director Jackie Bugnion. “By luring them into the OVDP in a form of entrapment, then hitting them with ruinous penalties based on the overseas assets, instead of using the discretion which was within IRS purview for benign actors, the IRS treated ordinary, hard-working Americans like criminals. Most of the unreported accounts were pension funds and basic financial accounts used for living expenses and were not being used to hide assets."

Part of the alleged abuse was well-documented in a National Taxpayer Advocate 2011 Report entitled, “The IRS’s OVDP ‘Bait and Switch’ May Undermine Trust for the IRS and Future Compliance Programs.” See the report at

Asking for a response to this alleged aggressive targeting, a “Taxpayer Advocate Directive (TAD)” was issued in 2011, requiring the IRS to respond within three months. To date, ACA is unaware of the receipt of any response to the TAD.

“Now that Congress is finally taking a hard look at some of the questionable practices of the IRS over the last several years, we urge them to include the 2009 OVDP and the general use of FBAR penalties against Americans living overseas in their ongoing investigation,” added ACA Executive Director Marylouise Serrato. “Some Americans overseas are losing their life savings due to IRS targeting and this kind of alleged discrimination must end.”

In addition to ensuring a fair and transparent OVDP, ACA is also urging Congress to adopt its residence or territorial-based taxation proposal (RBT) as part of comprehensive tax reform efforts. Doing so will bring the U.S. in line with every other industrialized nation and make America more financially and economically competitive.

To read ACA’s letter to Congress concerning the alleged abusive targeting of overseas Americans, click here:

For more information, please contact Marylouise Serrato, Executive Director ACA, Tel: +1 202 322 8441, Email:    info.aca (at) americansabroad (dot) org

American Citizens Abroad (ACA), which was founded in 1978, is a non-profit, non-partisan, volunteer association whose mission is to represent the interests of Americans living overseas.

ACA is a membership organization representing Americans abroad. It is reorganizing as a US tax-exempt organization operating under section 501(c)(4) of the Internal Revenue Code. Alongside it will be American Citizens Abroad Global Foundation, a publicly-supported charity under section 501(c)(3). For more information, visit

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MaryLouise Serrato

Anne Hornung-Soukup

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