US Accountants Oppose Overseas Housing Tax Proposals

by Mike Godfrey, Tax-News.com, Washington

06 July 2004

The American Institute of Certified Public Accountants is urging Congress to reject a proposal contained in Senate tax legislation that restricts employer-provided housing benefit for workers based overseas.

In a letter to House and Senate tax writers, the AICPA argued that the measure, which is included in the Senate ‘JOBS’ bill, "will reverse long-standing tax policy and result in the loss of American jobs and exports".

Under current rules, overseas workers are permitted to exclude up to $80,000 from American income taxes, and where employers pay for housing costs, individuals can exclude costs that are considered not to be “lavish or extravagant”.

However, under proposals advanced by Sen. Mary Landrieu (D-La), the employer-paid housing costs will be included in the $80,000 limit as part of a plan that is intended to help firms who continue to pay the salaries of National Guard and Reservists on active duty. Such a move is projected to raise $3.1 billion over ten years.

The AICPA fears that if the proposal becomes law, it will lead to many foreign-based American workers losing their jobs, as firms will hire foreign employees in their place.

The AICPA, which represents some 350,000 accountants, is one of a number of trade and business groups opposing the move, including the American Bankers Association and the US Chamber of Commerce.

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