Survey on Expatriate Housing Allowances

As you know, we are working to monitor the effects of recent changes to Section 911 of the U.S. Internal Revenue Code and bolster the case for maintaining or expanding its benefits for U.S. citizens living and working overseas.
As part of this effort, we are asking that AmChams distribute this survey to U.S. citizens among their members and that company representatives complete it and return it as indicated at the end of this memorandum.
This information will be kept confidential, and only the compiled, averaged results will be made known. Please return this form to Tiffany Brock at [email protected] by September 29, 2006.

Background

We are gathering information regarding expatriate housing costs in order to support a request that the U.S. Department of the Treasury use its authority to provide appropriate upward adjustments to the newly-enacted cap on the housing cost exclusion for high-cost locations around the world.
The legislative history with respect to the provision granting this adjustment authority states the intention that Treasury use publicly available information such as State Department reports to make adjustments for higher-cost locations.

The legislative history reference is to quarterly reports published by the State Department on living quarters allowances for U.S. government civilian employees stationed abroad.
Government employees working abroad receive the lesser of their actual housing costs or the specified maximum rate for their location.
The rates are calculated based on government employees’ reported costs and are stated to be intended to cover at least 80% of employees for their full annual rent and utilities expenses.
The rates are established for three different salary groupings and for single persons and two-person families; these stated amounts are increased by between 10% and 30% for larger families, depending on size.
The State Department description of the computation of these allowances is at http://www.state.gov/m/a/als/qtrpt/60476.htm.
The January 2006 published report with the allowances for all locations is at http://www.state.gov/m/a/als/qtrpt/60771.htm.

Given the legislative history, we expect that the State Department report will be a starting point in Treasury’s determinations with respect to adjustments for particular locations.
The cost figures in this report for many locations are low relative to actual costs faced by companies with expatriate employees.
Therefore, it will be important to demonstrate to Treasury that this data is not representative and needs to be supplemented with private sector information for purposes of determining necessary adjustments to the housing exclusion cap.

In making the case for appropriate upward adjustments to the housing exclusion cap, it will be useful to develop information that compares companies’ actual experience to the State Department living quarters allowances.
We have put together this brief survey for purposes of gathering this information.