The prayers of Americans living overseas may have finally been answered. A bill is in the works in the United States Congress to establish “Territorial Taxation for Individuals” (TTFI). If passed, the bill would change the current tax regime from one of “U.S. citizenship-based taxation” to “residence-based taxation.” This would go a long way to alleviating the U.S. tax burdens that Americans living overseas have endured for nearly a century (in Cook v. Tait, 265 U.S. 47, decided in 1924, the Supreme Court of the United States interpreted the U.S. Constitution to permit the federal government’s worldwide taxation of nonresident U.S. citizens).

While the idea of transitioning from a U.S. citizenship-based taxation system to a residence-based taxation system is nothing new, it has previously been met with strong resistance by lawmakers on both sides of the aisle. Just as the expression “third time’s a charm” is used as a means of encouragement, expressing hope that things will work out on the third try, this time around might be the water-shed moment for Americans living overseas as there appears to be bipartisan support, as unlikely as this might seem in this politically-charged climate.

For those unfamiliar with worldwide taxation, some background is in order. Worldwide taxation is based on “political allegiance.” Political allegiance refers to the allegiance of the taxpayer who owns the income or assets. How a country defines the phrase, “political allegiance” leads to two different types of worldwide taxation: (1) “citizenship-based” and (2) “residence-based.”

Taking what many consider to be a draconian position for a country that sits at the epicenter of the global economy and whose Constitution provided it with the blueprint to become the world’s first modern democracy , the United States defines “political allegiance” for tax purposes as “an individual’s citizenship,” regardless of residence. The implications of this are nothing short of staggering. Live and work in Rio De Janeiro? You must pay taxes to the U.S. government on your foreign-source income. Own a business in China? The U.S. will tax the profits of that business. Very simply, U.S. taxpayers must report all of their income on their U.S. tax returns, even income earned outside of the United States. This makes the United States one of only two countries left in the world that still taxes its citizens on their worldwide income.

Unlike the United States’ heavy-handed definition of political allegiance, other nations define “political allegiance” for tax purposes on “the basis of residence.” In so doing, these countries tax an individual’s global income and holdings only if the individual resides in that nation. This has come to be known as “residence-based” taxation.

As the poster-child of residence-based taxation, Canada imposes worldwide taxation on all of its residents without regard to Canadian citizenship. Many a taxpayer has asked the question, “Is the distinction between citizenship-based taxation and residence-based taxation one without a difference?” Or, to use a Shakespearian reference, “Is it much ado about nothing?” No.

The primary difference between the U.S. system of citizenship-based taxation and the Canadian system of residence-based taxation is quite simple. A non-resident Canadian citizen – one who lives outside of Canada – does not pay Canadian income tax on the income that he or she earns in the country in which he now resides. That does not necessarily mean that he won’t pay any income tax to the Canadian government. However, he will only pay Canadian income tax if he earned any income in Canada. To the extent that the non-resident Canadian citizen did not earn any income in Canada during the year in which he lived outside of Canada, he does not owe the Canadian government any income tax.

A non-resident U.S. citizen, on the other hand, must pay U.S. taxes not only on the income that is generated in the United States but also on the income that is generated in the foreign country in which he now resides.

With the Trump Administration’s move toward a territorial-based regime for corporate taxpayers, this may well be the ideal time for Americans living overseas to strike. In fact, there may be no better time. Not letting any grass grow under his feet, Solomon Yue, CEO of Republicans Overseas has been actively involved with drafting the TTFI bill.

According to news outlets, Mr. Yue plans to have a press conference to present information about it at a special AmCham event taking place in Canada at the end of August.

In the meantime, we are left to wait and see whether Congress will finally answer the call.