We recently wrapped up our annual US Expat Opinion Survey, and some of the results were quite surprising! We know US expats are an influential group, but based on the feedback we received, it seems there is a huge opportunity for Americans abroad to make a difference when it comes to this year’s Presidential Election. See the key insights and read more about these stats below!
Along with our survey advisory board – made up of Expat Network, Where Americans Are Welcome, Expat Everyday Support Center, FAWCO and World of Expats – we surveyed close to 1,800 US expats living and working abroad with various incomes and professions. The intent of the survey was to gather insights and opinions representative of US expats in an effort to advocate for the interests of all Americans living abroad.
- 73% of US expats intend to vote in the 2016 Presidential Election – this number is up from last year, as 57% of those respondents said they voted in the last election
- Only 7% of US expats believe the US government represents their interests, almost identical to last year’s responses
- 64% of survey respondents may choose to renounce citizenship and 6% have already done so and citizenship renunciations continue to grow, with a 20% year-over-year increase in 2015 alone
- Nearly 37% of those considering renunciation cite the burden of US tax filing requirements as the reason – this number is up 6% from 2015
- Nearly 45% of expats surveyed would like the US government to repeal FATCA, the 2010 law that requires all American taxpayers to report foreign financial accounts and offshore assets – this is up significantly from 2015, in which only 9% wanted FATCA repealed.
- Almost 54% would support an initiative to the US to repeal FATCA
- Over 12% of respondents said they are having to switch banks because their foreign financial institution doesn’t want to deal with US citizens
US Presidential Election
Out of nearly 1,800 respondents, over 73% said they plan to vote in the upcoming election. Assuming this is representative of the entire expat population, this is nearly 6.4 million voters! That is a significant number of potential votes that have been largely ignored by US politicians – and this group could have a real, material impact on the outcome of the election.
In contrast, just 8% of last year’s survey respondents who didn’t vote in the last election chose not to because they didn’t feel the candidates represented their interests. This year, the number increased to a whopping 26%! This goes to show that those who didn’t vote in the prior election may have been more inclined to vote this year if a candidate actively addressed their concerns.
“This is a strong, opinionated group whose voice has a significant opportunity to be heard in the upcoming Presidential election – so government leaders should be taking the time to acknowledge and advocate for their needs and interests,” said David McKeegan, Co-founder of Greenback Expat Tax Services.
We know that American expats have been renouncing their citizenship in record numbers as of late. Interestingly, the number of survey respondents who said they were seriously considering renouncing their citizenship was down 4% from last year, at a total of 22%. The number of expats who wouldn’t consider renunciation remained flat year-over-year, at 29%. However, the number of expats who wouldn’t rule out renunciation increased by nearly 5%, to 42%.
Additionally, the number of US expats who’ve chosen to renounce their citizenship increased 20% year-over-year in 2015. In fact, 64% of those surveyed said they may choose to renounce their citizenship, and 37% cite the burden of Federal tax obligations as the reason, up 7% over last year.
Over 83% of US expats surveyed feel their interests are not well represented by the US government – with only 7% of those living abroad feeling that they are fairly represented. Surprisingly, both of these numbers are slightly decreased from last year (3% and 1%, respectively), which is interesting, as not much has changed over the past year in terms of government representation of US expats.
“US Expats are frustrated that they are not well represented by their government, while being required to file tax forms and pay taxes,” said Norman Viss of Expat Everyday Support Center. “It’s time the US government pays attention to the concerns of these 6.4 million voters, who are globally located, interested and active in global issues, and want to be a positive influence for US interests around the world, because they will be voting!”
IRS Amnesty Programs
Over 45% of US expats haven’t heard of the Streamlined Filing Procedures, a program put in place by the IRS to help US taxpayers get caught up on their US taxes without late filing or FBAR penalties. This number is actually up 4% this year.
On January 1, 2016, an unprecedented law with new consequences was implemented for late tax filers – the US State Department can now revoke an expat’s passport if they are behind on US taxes and owe more than $50,000 to the IRS. This is big and potentially scary news for all expats. After all, the penalty for willfully failing to report foreign bank accounts starts at $10,000 – so if you have 5 accounts you failed to report, you could hit the $50,000 total in a single year and lose your passport!
Foreign Account Tax Compliance Act (FATCA)
As you know, FATCA is a major US initiative to uncover US taxpayers hiding money overseas in an attempt to avoid American taxes. FATCA requires individual to report their offshore assets if they exceed certain thresholds. Over 32% of survey respondents said they are affected by FATCA and must file Form 8938, while 41% said they are not affected. Interestingly, though, when asked if they would support an initiative to repeal FATCA, nearly 54% said yes. Also, 44% of expats surveyed said they would like to see the US government address the repeal of FATCA on behalf of all Americans living abroad. FATCA is clearly a hot topic among US expats, though the government has yet to address their concerns.
While many interesting insights came out of this year’s survey, the potential effect US expats could have on the upcoming election are the most impactful. This large, underrepresented group of Americans living abroad who have consistently been disappointed with the US government could have a huge impact on the outcome of the election!
Also, the data shows yet again that renouncing citizenship is a very desirable option for many expats when faced with the burden of Federal tax obligations, and only a small percentage of Americans abroad feel their interests are fairly represented by the US government. Many US expats show a preference toward residence-based taxation, rather than citizenship-based taxation, which is an avenue the government could pursue in an attempt to relieve the burden and frustration of filing US taxes for all expats.
“This year’s survey yet again reinforces the fact that renouncing citizenship is considered a very desirable option for many expats when faced with burdensome tax obligations, and only a small percentage of Americans abroad feel their interests are fairly represented by the US government,” stated McKeegan.
Have US Expat Tax Questions?
Greenback can help! Contact us today and our expat-expert CPAs and IRS Enrolled Agents can help you navigate the complicated nature of US expat taxes.