AICPA Opposes Restrictions on Foreign Housing Benefit

A Senate proposal to limit a housing benefit employers provide to overseas workers has sparked opposition from the AICPA and business groups concerned about the loss of American jobs.

The measure would change the 1978 formula for figuring the benefits for U.S. expatriate workers. Currently, overseas workers are allowed to exclude up to $80,000 from U.S. income taxes. If their employers pay for housing, however, they can exclude housing costs as long as they are not "lavish or extravagant," the Wall Street Journal reported.

A proposal sponsored by Sen. Mary Landrieu, D-La., would include the employer-paid housing cost as part of the $80,000 cap on income excluded from taxes. The measure, which would raise $3.1 billion over 10 years, would help offset the cost of her plan to give tax breaks to companies that continue to pay the salaries of National Guard and Reserve members called to active duty.

In a letter to House and Senate tax writers, the AICPA said such a move "will almost certainly result in less employment for Americans abroad, as foreign workers will be hired in place of the Americans who would otherwise be employed in these positions."

A coalition of 31 political and business groups, which include such diverse groups as the American Bankers Association, U.S. Chamber of Commerce and the Information Technology Association of America, also oppose the proposal.

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