Laura Snyder, Karen Alpert & John Richardson, Tax Treaties Do Not Protect Overseas Americans, 185 Tax Notes Fed. 793 (Oct. 28, 2024):

We appreciate this opportunity to respond to “Trump Vows to End ‘Double Taxation’ of Overseas Citizens” by Alexander Rifaat. 

While we have multiple concerns with the opinions expressed by professor Reuven Avi-Yonah in the article, we would like to focus on his comment about the tax treaties the United States has concluded with other countries. According to professor Avi-Yonah, the “tiebreaker” clause contained in these treaties serves to protect overseas Americans from double taxation.

This is not the case. For the most part, U.S. tax treaties benefit two groups of people: (i) persons (of any nationality) living in the United States, and (ii) persons who are not U.S. citizens living outside the United States. U.S. citizens who live outside the United States cannot, in most cases, benefit from a U.S. tax treaty because of what is referred to as the “saving clause.” …

Regardless of one’s opinion of former President Trump or of his sincerity in promising to act on this issue if elected, his public acknowledgement of the problems faced by overseas Americans because of U.S. tax policies should be welcomed. Hopefully it will initiate a long overdue national — if not international — discussion about how the United States uses tax policy to discourage emigration and to punish those who emigrate. Hopefully the discussion — in Tax Notes and elsewhere — will both: (1) include the contributions to knowledge of Americans who actually live outside the United States and have firsthand experiences with the policies; and (2) be grounded in accurate and well-researched facts.

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