This section aims to clarify a lot of the important names, acronyms and jargon that Americans Abroad may encounter.
ACA: Affordable Care Act
ACA is the acronym for the Affordable Care Act whose official name is “Patient Protection and Affordable Care Act.” It is sometimes also referred to as ObamaCare. It is also the acronym for Americans Citizens Abroad (ACA), so don’t get confused!
AEOI: Automatic Exchange of Information
Automatic exchange of information involves the systematic and periodic transmission of “bulk” taxpayer information by the source country to the residence country concerning various categories of income (e.g. dividends, interest, etc.). Automatic Exchange of Information - OECD
CARES ActThe Coronavirus Aid, Relief, and Economic Security Act is a 2020 US stimulus bill that issued financial support during the coronavirus pandemic. See our Coronavirus Pandemic and CARES Act Legislation page for more information.
CBT: Citizenship-based taxation
US tax regime that taxes individuals based on their citizenship regardless of where their income is earned.
CFC: Controlled Foreign Corporation
A controlled foreign corporation (CFC) is a corporate entity that is registered and conducts business in a different jurisdiction or country than the residency of the controlling owners. Control of the foreign company is defined, in the U.S., according to the percentage of shares owned by U.S. citizens. Controlled Foreign Corporation (CFC) Definition (investopedia.com)
CRS: Common Reporting Standard
The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.
FATCA: Foreign Account Tax Compliance Act.
Requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments to the IRS. FATCA also requires U.S. persons to report, depending on the value, their foreign financial accounts and foreign assets to the IRS. Foreign Account Tax Compliance Act (FATCA) | Internal Revenue Service (irs.gov)
FBAR: Foreign Bank Account Report
Annual filing of certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department held outside of the United States in the aggregate total of $10,000. Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service (irs.gov)
FDII: Foreign-derived intangible income
Foreign Derived Intangible Income (FDII) is a special category of earnings that come from the sale of products related to intellectual property (IP). If a U.S. company holds IP in the U.S., such as patents or trademarks, and has sales to foreign customers based on that IP, the profits from those sales face a lower tax rate. Foreign Derived Intangible Income (FDII) | Tax Basics | Tax Foundation
FFI: Foreign Financial Institution
Foreign bank, investment or financial institution.
FEIE – Foreign Earned Income Exclusion
The FEIE exclusion can be used to exclude “foreign earned income” from being subject to US tax. What this means for most expats is that they can use the FEIE to exclude foreign wage income or foreign self-employment income, from being subject to US tax. Foreign Earned Income Exclusion | Internal Revenue Service (irs.gov)
FTC: Foreign tax credits
Foreign tax credits are foreign taxes that are imposed on you by a foreign country that can be used to offset US taxes. 4491_foreign_tax_credit.pdf (irs.gov)
FVAP: Federal Voting Assistance Program
The Federal Voting Assistance Program is a U.S. voter assistance and education program. https://www.fvap.gov.
GILTI: Global intangible low-taxed income
Global intangible low-taxed income is a category of income that is earned abroad by U.S.-controlled foreign corporations (CFCs) and is subject to special treatment under the U.S. tax codeIRS and Treasury issue guidance related to global intangible low-taxed income (GILTI) | Internal Revenue Service
Government Accountability Office
The Government Accountability Office (GAO) is known as
the investigative arm of Congress" and "the congressional watchdog. GAO supports the Congress in meeting its constitutional responsibilities and helps improve the performance and accountability of the federal government for the benefit of the American people.
House Ways & Means Committee
The U.S. Constitution requires that all bills regarding taxation must originate in the House of Representatives. The Committee of Ways and Means is the chief tax-writing committee of the United States House of Representatives. Members of the Ways and Means Committee are not allowed to serve on any other House Committees unless they apply for a waiver from their party's congressional leadership. The Committee has jurisdiction over all taxation, tariffs, and other revenue-raising measures, as well as a number of other programs including:
- Social Security
- Unemployment insurance
- Enforcement of child support laws
- Temporary Assistance for Needy Families
- Foster care and adoption programs
IRA: Individual retirement account
An Individual Retirement Account is a type of US tax-advantaged retirement plan that is standard in the U.S.
IRS: Internal Revenue Service
The Internal Revenue Service is the nation's tax collection agency and administers the Internal Revenue Code enacted by Congress. The IRS Strategic Plan is a roadmap to guide IRS operations and to meet the changing needs and expectations of our nation's taxpayers and tax professionals who serve them.
ITIN: Individual Taxpayer Identification Number
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration. Individual Taxpayer Identification Number | Internal Revenue Service (irs.gov)
Joint Committee on Taxation
The Joint Committee on Taxation (JCT) is a nonpartisan committee of the United States Congress, originally established under the Revenue Act of 1926. The Joint Committee operates with an experienced professional staff of Ph.D economists, attorneys, and accountants, who assist Members of the majority and minority parties in both houses of Congress on tax legislation.
The Joint Committee is chaired on a rotating basis by the Chairman of the Senate Finance Committee and the Chairman of the House Ways and Means Committee. During the first Session of each Congress the House has the Chair and the Senate has the vice-chair; during the second session the roles are reversed.
The Joint Committee Staff is closely involved with every aspect of the tax legislative process, including:
- Assisting Congressional tax-writing committees and Members of Congress with development and analysis of legislative proposals;
- Preparing official revenue estimates of all tax legislation considered by the Congress;
- Drafting legislative histories for tax-related bills; and
- Investigating various aspects of the Federal tax system.
The Joint Committee Staff interacts with Members of Congress, Members of the tax-writing committees, and their staff on a confidential basis and enjoys a high-level of trust from both sides of the political aisle and in both houses of Congress. Because the Joint Committee Staff is independent, tax-focused, and involved in all stages of the tax legislative process, the staff is able to ensure consistency as tax bills move through committees to the floor of each chamber, and to a House-Senate conference committee.
The Medicare Administration provides health insurance coverage to individuals who are age 65 and over, under age 65 with certain disabilities, and individuals of all ages with ESRD. Medicaid provides medical benefits to groups of low-income people, some who may have no medical insurance or inadequate medical insurance.
NRA: Nonresident Alien
An non resident alien is any individual who is not a U.S. citizen or U.S. national who has not passed the green card test or the substantial presence test. Nonresident Aliens | Internal Revenue Service (irs.gov)
PFIC: Passive Foreign Investment Company
A passive foreign investment company (PFIC) is a corporation, located abroad, which either has at least 75% of the corporation's gross income is "passive”, derived investments not related to regular business operations or 50% of the company's assets are investments, which produce income in the form of earned interest, dividends of capital gains. Describing a Passive Foreign Investment Company—PFIC (investopedia.com)
RBT: Residence-based taxation
Tax regime that taxes individuals based on there the income is earned, similar to territorial taxation.
SCE: Same country exemption
Where a US taxpayer truly resides in a foreign country and has a normal financial account at a bank or similar institution in the same country, the financial account would be exempt from FATCA reporting. Neither the financial institution or US taxpayer would have to report the account.
Senate Finance Committee
The Senate Finance Committee concerns itself with matters relating to: taxation and other revenue measures generally, and those relating to the insular possessions; bonded debt of the United States; customs, collection districts, and ports of entry and delivery; reciprocal trade agreements; tariff and import quotas, and related matters thereto; the transportation of dutiable goods; deposit of public moneys; general revenue sharing; health programs under the Social Security Act, including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF) and other health and human services programs financed by a specific tax or trust fund; and national social security.
Social Security Administration
The Social Security Administration assigns Social Security numbers, and administers the Social Security retirement, survivors, and disability insurance programs. They also administer the Supplemental Security Income program for the aged, blind, and disabled.
SSS: Selective Service System
TCJA: Tax Cuts and Jobs Act
The Tax Cuts & Jobs Act was a package of major changes to the U.S. tax code signed into law by U.S. president Donald Trump on 20 December, 2017 which moved corporation taxation to a territorial regime, excluding US taxation on income earned outside of the United States.
TCK: Third culture kid
Children who were raised in a culture other than that of their parents for a significant portion of their childhood.
The Taxpayer Advocate Service is an independent organization within the IRS. The TAS ensures that every taxpayer is treated fairly and that they know and understand their rights. TAS advocates can help if you have tax problems that you can't resolve on your own.
The Treasury Department is the executive agency responsible for promoting economic prosperity and ensuring the financial security of the United States. The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions. The Department of the Treasury operates and maintains systems that are critical to the nation's financial infrastructure, such as the production of coin and currency, the disbursement of payments to the American public, revenue collection, and the borrowing of funds necessary to run the federal government. The Department works with other federal agencies, foreign governments, and international financial institutions to encourage global economic growth, raise standards of living, and to the extent possible, predict and prevent economic and financial crises. The Treasury Department also performs a critical and far-reaching role in enhancing national security by implementing economic sanctions against foreign threats to the U.S., identifying and targeting the financial support networks of national security threats, and improving the safeguards of our financial systems.
US State Department