The Effects of the US Government’s Policies on Americans Living Abroad

by Thailand Lawyer on August 16, 2011

Contributed by Guest Blogger Lorraine Moore

Policies currently being implemented by the US government will have significant impacts on US expats living abroad, particularly in relation to their finances, domestic relationships and access to health care (if they return to the US).  This post will focus on the effects of the Report of Foreign Bank and Financial Accounts (FBAR), the changes in the visa application process for foreign spouses and children, as well as the opt in provision of the US Health Care Law.


The FBAR is a document all US citizens must submit at the same time as they complete their annual Income Tax Return, if the aggregate value of their overseas accounts exceeds $10,000 in the forthcoming tax year.  The report must be submitted to the US Department of Treasury and contains information concerning each US citizen’s banking interests and activities overseas.  This will have important impacts on US expats and their spouses living abroad because they must include any jointly owned accounts, even if they are owned in conjunction with a foreign spouse, or friends, and accounts held in trust or guardianship for their children.  A comprehensive list of the accounts the FBAR applies can be accessed at the IRS website, on the Foreign Account Tax Compliance Act (FATCA) link.

The result is that the US government will hold significant information on the financial circumstances of many American expats, including their spouses and children, who may not be American citizens and may never intend to try and gain US citizenship.  As such, this group of people may never benefit from any form of public services the US government provides.

Changes in the US Visa Application Process for Foreign-born Spouses and Children

The full significance of this intrusion in non-US citizen’s financial affairs is amplified in circumstances where they are trying to gain US citizenship.  This is due to the recent changes to the US visa application process for foreign spouses and children of US expats.  From the 15th of August, 2011, US expats will have to apply directly to the US Citizenship and Immigration Service (USCIS) in order to bring their family to the US, instead of the US Consular Service in their respective country of residence.  This is important because where the visa application process would once have taken between one to three months from the initial application, immigration lawyers argue that the change could result in the process being extended to a few years for applicants that reside in the 75% of countries that do not have USCIS offices.  Democrats Abroad estimate that 10,000 American expats will be affected by this change.

The American Immigration Lawyers Association (AILA) highlight the unfairness in this policy because applicants who are lucky enough to reside in countries that have a USCIS office can continue to apply for a visa in the former manner.  However, expats that have to make their application to the USCIS lockbox office in Chicago could experience significant delays.  The change in legislation could also have noticeable impacts for US expats who have to return to the US at short notice, for either work or other domestic reasons.  The result could be a long period of separation from their family, or even a change of employment.

New US Healthcare Law

If and when US expats do return to their country, they have to consider the implications of the opt-out provision of the US Healthcare Law.  As it currently stands, US expats living abroad do not have to be as concerned about this provision.  Indeed, the Association of Americans Resident Overseas’ Committee on Social Security and Medicare has stated that the only way the legislation affects US expats is by ensuring their exemption from failing to subscribe to health insurance in the US (or ‘opting out’).  However, if US expats then return to the US, they probably will not be covered by the US healthcare plan.

As such, it is clear that current policies will have noticeable impacts on US expats and their families, especially if and when they decide to return to the US, and particularly if their family members are not US citizens.  Despite this, the US government still sees fit to hold information on foreign spouses and family members, even though their chances of benefiting from US government services and provisions are becoming more difficult to access.

{ 1 comment… read it below or add one }

Frank G Anderson October 27, 2013 at 22:50

You use the word ‘forthcoming’ above in referring to filing income taxes. Do you mean ‘current tax year’?

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