[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5432 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 5432

 To create a short form tax return to simplify the return process for 
        certain taxpayers living abroad, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 13, 2023

 Mr. Beyer (for himself, Mr. Davis of Illinois, Mr. Trone, Mr. Nadler, 
and Ms. Titus) introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
 Financial Services, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To create a short form tax return to simplify the return process for 
        certain taxpayers living abroad, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Simplification for Americans 
Abroad Act''.

SEC. 2. SHORT FORM FOR CERTAIN TAXPAYERS LIVING ABROAD.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall make available a form for use by specified individuals 
to file the return of tax imposed by chapter 1 of the Internal Revenue 
Code of 1986. Such form shall replace Internal Revenue Service Forms 
1040, 2555, 1116, 8938, 5471, 3520, 3520A, 8621, 8858, 8865, 926, 708, 
FinCEN Form 114, and other forms for disclosing income, assets, 
deductions, and offsets, and shall be as similar to Form 1040-EZ as it 
existed in 2017, except that the form shall be sufficient to allow an 
individual to, with respect to a taxable year--
            (1) demonstrate that such individual is a qualified 
        individual under section 911(d)(1) of the Internal Revenue Code 
        of 1986,
            (2) declare foreign income described in section 911 of such 
        Code,
            (3) characterize income based on source, including--
                    (A) wages,
                    (B) self-employment income or business income,
                    (C) contract income,
                    (D) foreign government benefits,
                    (E) pension and other retirement income,
                    (F) scholarships and fellowship grants,
                    (G) interest,
                    (H) dividends, and
                    (I) capital gains,
            (4) claim the standard deduction and, if applicable, the 
        child tax credit,
            (5) declare foreign taxes paid or accrued, and
            (6) declare United States source income from retirement, 
        pension and Social Security benefits to be treated as sourced 
        from treaty income where tax has been paid upon distribution.
    (b) Specified Individual.--
            (1) In general.--For purposes of this section, the term 
        ``specified individual'' means, with respect to a taxable year, 
        an individual--
                    (A) who is a qualified individual under section 
                911(d)(1) of the Internal Revenue Code of 1986, and
                    (B) who declares--
                            (i) a gross income of not more than 
                        $400,000, and
                            (ii) a tax liability of $0.
            (2) Inflation adjustment.--In the case of any taxable year 
        beginning after 2024, the $400,000 amount in paragraph 
        (1)(B)(i) shall be increased by an amount equal to--
                    (A) such dollar amount, multiplied by
                    (B) the cost-of-living adjustment determined under 
                section 1(f)(3) of the Internal Revenue Code of 1986 
                for the calendar year in which the taxable year begins, 
                determined by substituting ``2023'' for ``2016'' in 
                subparagraph (A)(ii) thereof.
    (c) Effective Date.--The form required by subsection (a) shall be 
made available for taxable years beginning one year after the date of 
the enactment of this Act.

SEC. 3. EXPANSION OF INCOME ALLOWED AS FOREIGN EARNED INCOME.

    (a) In General.--Section 911 of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (b)(1)(B), by striking clause (i) and by 
        redesignating clauses (ii) through (iv) as clause (i) through 
        (iii), respectively,
            (2) in subsection (b)(1)(A), by striking ``attributable to 
        services performed by such individual'' and inserting 
        ``attributable to services performed by such individual or 
        benefits received by such individual'',
            (3) in subsection (d)(2), by striking ``wages, salaries, or 
        professional fees'' and inserting ``wages, salaries, 
        professional fees, pensions, scholarships, fellowship grants, 
        distributions from retirement funds, or payments received by 
        the taxpayer with respect to disability, unemployment, family 
        medical leave, or childcare'', and
            (4) in subsection (e)(2), by striking ``Except with the 
        consent of the Secretary, any taxpayer who makes such a 
        revocation for any taxable year may not make another election 
        under this section for any subsequent taxable year before the 
        6th taxable year after the taxable year for which such 
        revocation was made.''
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 4. INFORMATION RELATING TO SPECIFIED FOREIGN FINANCIAL ASSETS.

    (a) In General.--Section 5314 of title 31, United States Code, is 
amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (d) and (e), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) Specified Foreign Financial Assets.--
            ``(1) In general.--If a person makes a transaction that 
        would require reporting under subsection (a), and such 
        transaction involves a specified foreign financial asset, the 
        reporting requirements described in subsection (a) shall--
                    ``(A) only apply if the transaction involves an 
                amount that exceeds the aggregate value threshold set 
                forth in section 6038D of the Internal Revenue Code of 
                1986; and
                    ``(B) be satisfied by attaching to such person's 
                return of tax for such taxable year the information 
                required under section 6038D of the Internal Revenue 
                Code of 1986.
            ``(2) Specified foreign financial asset.--For purposes of 
        this section, the term `specified foreign financial asset' has 
        the meaning given the term in section 6038D(b) of the 2211 
        Internal Revenue Code of 1986.''.
    (b) Information With Respect to Specified Foreign Financial 
Assets.--Section 6038D of the Internal Revenue Code of 1986 is 
amended--
            (1) in subsection (b)--
                    (A) by striking ``For purposes of this section,'' 
                and inserting ``Except as provided in paragraph (2), 
                for purposes of this section,'',
                    (B) in paragraph (2), by redesignating 
                subparagraphs (A), (B), and (C) as clauses (i), (ii), 
                and (iii), respectively,
                    (C) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively,
                    (D) by striking ``For purposes'' and inserting:
            ``(1) In general.--For purposes'', and
                    (E) by adding at the end the following new 
                paragraph:
            ``(2) Certain accounts exempt from financial reporting.--An 
        account is exempt from the reporting requirement under 
        subsection (a) if it is an account--
                    ``(A) the maximum balance of which does not exceed 
                $600 for the entire duration of the taxable year,
                    ``(B) the usage of which is limited to a single 
                merchant, or
                    ``(C) the type of which is listed as an exempt 
                account in Annex II of the Foreign Account Tax 
                Compliance Act Intergovernmental Agreement in effect 
                between the United States and the country in which such 
                account is held.'',
            (2) by redesignating subsections (f), (g), and (h) as 
        subsections (g), (h), and (i), respectively, and
            (3) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year after 
        2024, the $50,000 amounts in subsection (a) and subsection (e) 
        shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2023' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
            ``(2) Rounding.--If any dollar amount increased under 
        paragraph (1) is not a multiple of $100, such dollar amount 
        shall be rounded to the nearest multiple of $100.''.
    (c) Furnishment of Information by Foreign Financial Institutions to 
Owners of Specified Foreign Financial Assets.--Section 1471(c) of such 
Code is amended by adding at the end the following new paragraph:
            ``(4) Requirement to provide information to account 
        holders.--If a foreign financial institution submits a report 
        under this section, such institution shall provide account 
        holders with a copy of such report within 15 days of such 
        submission.''.
    (d) Disclosure of Specified Foreign Financial Assets to the 
Financial Crimes Enforcement Network.--Section 6103(l) of such Code is 
amended by adding at the end the following new paragraph:
            ``(23) Disclosure of specified foreign financial assets to 
        the financial crimes enforcement network.--The Secretary may, 
        upon written request, furnish to the proper officers and 
        employees of the Financial Crimes Enforcement Network such 
        return information with respect to specified foreign financial 
        assets as is attached to tax returns pursuant to section 6038D, 
        but only to the extent necessary in investigating suspected 
        money laundering or the financing of terrorism.''.
    (e) Effective Date.--
            (1) The amendments made by subsection (a) shall apply to 
        reports filed with respect to calendar years beginning after 
        the date of the enactment of this Act.
            (2) The amendments made by subsections (b), (c), and (d) 
        shall apply to returns filed with respect to taxable years 
        beginning after the date of the enactment of this Act.
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