What would you need to demonstrate under the proposed election?

Forbes reports that the proposal would require proof of foreign residence and certification of five years of compliance under penalty of perjury. Those conditions belong in a review of any plan depending on the bill. They do not establish that you can currently make the proposed election or claim its treatment.

Would the proposal address your foreign banking difficulties?

Forbes reports that the proposed election would remove several reporting obligations, including FATCA, which its author says might ease banking difficulties abroad. That is a possible effect described by the author, not an established improvement to your account access. Keep any hoped-for banking benefit separate from requirements you can currently document.

Could the proposed departure tax affect your decision?

Forbes reports that the bill would apply a departure tax above the then estate-tax exclusion of $13.61 million, with grandfather exemptions. The author also notes that a similar 2018 bill, H.R. 7358, failed to advance. Ask how the proposed departure provision would matter to your circumstances without assuming the election is available.

Do not build your move around a proposed tax exemption. FNC

In short

If you are a US citizen abroad, the Residence-Based Taxation for Americans Abroad Act is a proposal, not an exemption you can claim. Forbes reported in December 2024 that the bill would let electing individuals be taxed only on US-source income after proving foreign residence and certifying five years of compliance, with a departure tax above $13.61 million. The source does not establish enactment. If your move depends on this bill, mark that dependency plainly.

The United States Capitol in Washington, DC, under heavy cloud

What the article reports

Forbes reports that LaHood introduced the Residence-Based Taxation for Americans Abroad Act on December 18, proposing an elective residence-based alternative to citizenship-based taxation.
Under the proposal, electing individuals would be treated as nonresident aliens and taxed only on US-source income after proving foreign residence and certifying five years of compliance under penalty of perjury.
The proposed election would remove several reporting obligations, including FATCA, which the author says might ease banking difficulties abroad.
The proposal would apply a departure tax above the then estate-tax exclusion of $13.61 million, with grandfather exemptions.
The author notes that a similar 2018 bill, H.R. 7358, failed to advance.

This is an account of a bill as reported in December 2024. The supplied source does not establish its enactment or subsequent legislative status.

FNC’s take

If your relocation or banking plan depends on this exemption, mark that dependency plainly. A proposed benefit is not evidence that you can claim it. Separate the position you can document from the change you hope will happen.

For a US citizen considering the proposal, the useful questions are specific: can the stated compliance history be evidenced, how would residence be demonstrated, and would the proposed departure-tax provision matter? Those are review questions, not a conclusion that an election is available.

Common questions

What would you need to demonstrate under the proposed election?: Forbes reports that the proposal would require proof of foreign residence and certification of five years of compliance under penalty of perjury. Those conditions belong in a review of any plan depending on the bill. They do not establish that you can currently make the proposed election or claim its treatment.
Would the proposal address your foreign banking difficulties?: Forbes reports that the proposed election would remove several reporting obligations, including FATCA, which its author says might ease banking difficulties abroad. That is a possible effect described by the author, not an established improvement to your account access. Keep any hoped-for banking benefit separate from requirements you can currently document.
Could the proposed departure tax affect your decision?: Forbes reports that the bill would apply a departure tax above the then estate-tax exclusion of $13.61 million, with grandfather exemptions. The author also notes that a similar 2018 bill, H.R. 7358, failed to advance. Ask how the proposed departure provision would matter to your circumstances without assuming the election is available.

Information, not advice.

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