ACA Opposes Remittance Tax Proposal in Big Beautiful Bill

Trump bill puts Americans abroad at risk of considerable financial harm, says advocacy group

By News Team | Published on June 12, 2025

American Citizens Abroad (ACA), a non-partisan organization advocating on behalf of overseas Americans, says it has serious concerns with the remittance tax and accompanying compliance measures included in the House reconciliation bill. In a statement it said that the Senate should remove the new remittance tax and compliance requirements altogether as it puts Americans abroad at risk of considerable financial harm, adding to the sizable tax, filing and enforcement burdens they already bear.

ACA’s Legal Counsel Charles Bruce said: “Americans abroad will see the remittance tax as yet another punitive complication arising from what is, for them, an ordinary financial transaction. They will liken the new paperwork burden to that attached to Foreign Bank Account Report (FBAR) reporting – a compliance obligation they face for holding even ordinary accounts in financial institutions in the countries where they live and work”.

ACA’s analysis of the proposed remittance tax, published June 2, raises many questions that still need to be answered, including:

• The rules do not reference the Sender’s residence. It is unclear, therefore, if a transfer is exempted from the tax if the Sender is outside of the US when the transfer is initiated. On the face of it, it appears that transfers requested by Senders not located in any State do not attract the excise tax, but it is not clear what “located” means.
• Exceptions for small transfers can be anticipated; how small remains to be seen.
• None of the rules reference the currency of the transaction, requiring it to be in US dollars.
• How the tax is applied to cryptocurrency and other forms of digital or virtual currency is an open, interesting question, which will be closely considered by many.

You can read the analysis here.

Should the remittance tax be passed into law, ACA says it foresees additional challenges for Americans living and working overseas such as reduced access to banking. Foreign (non-US) banks approached by their American customers overseas asking the bank to facilitate a transfer from a related account in the US. to an account at that bank predictably will think here comes another load of compliance problems relating to US. tax enforcement. Many will impose considerable transaction administration fees; others will refuse the service entirely.

“American Citizens Abroad (ACA) supports the goal of ending illegal immigration in the US. but is deeply concerned that a new tax levied on remittances would place a heavy burden of compliance on legal, taxpaying US. citizens. We appreciate that American citizens would be able to recoup a new remittance tax in the form of a tax credit, but US. citizens would be unfairly penalized by this new tax and would need to wait up to a year before they can access their own money, which the IRS would collect in the form of an interest-free loan. We hope that Congress will recognize the burden this new tax would place on American citizens in the US. and abroad,” added Marylouise Serrato, ACA Executive Director.

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