Terror, Taxes Threaten U.S. Workers Abroad

May 20 -- For some U.S. citizens working overseas, the threat of the tax man could be even scarier than the threat of terrorism, and could soon have thousands packing for home.

Mounting terrorist threats and the possible end of a tax benefit for U.S. workers living overseas are conspiring to make life abroad more difficult for them, and could also make more and more U.S. companies replace Americans with local hires, a trend that has already begun in many industries.

The recent terrorist attacks in Saudi Arabia where nine Americans were killed, along with the outbreak of the SARS virus, have made many Americans who have considered working overseas nervous about the prospect, and some who are already working abroad more than a little wary.

"I have clients sitting in Greece who are too scared to fly even into neighboring Italy," says Andrea Elliott, an attorney for Global Visa Solutions, a Newport Beach, Calif.-based company that gets visas and work permits for multinational companies.

"They've become a target just by virtue of having a U.S. passport," she says.

Joe Gorman, chief of the Ann Arbor, Mich., Fire Department, recently returned to the United States in mid-April after serving as a contractor for 18 months in Saudi Arabia to Vinnell Corp., the Northrop Grumman subsidiary that lost nine employees in last week's terrorist attacks in Riyadh, Saudi Arabia.

Gorman, who returned to pursue his current opportunity, says despite being well-paid, many of his former colleagues are considering following in his footsteps.

"There's real doubt in some people's minds whether they're going to be able to continue," he says.

Thomas Webber, a franchise developer who lives in Jeddah, Saudi Arabia, and has been in the country for 21 years, says the recent developments won't send him back to the United States, but he is being more careful about security by checking his car and varying the routes he takes to and from work.

"Eight months ago I would have told anyone that Saudi Arabia is the safest place to come as an American," he says. "I still enjoy it but you have to be so careful today."