Blimey! IRS Computers Dun British Lord for $13 Million
The IRS are even after British Lords. But it looks like the IRS will just have to throw its moneyed, titled catch (and his millions) back. Russell states in a lawsuit filed last month in the U.S. Tax Court that he “is not and never has been a U.S. citizen or resident alien subject to U.S. income tax.”
Lucky Lord Russell–He can afford a lawsuit. I don’t know if his American wife is compliant.
(Someone else posted this Forbes article elsewhere, but I thought this deserved its own thread.)
Under current US tax laws, Winston Churchill would also have been subject to US income tax since he was born abroad to a US-citizen mother.
Thank you for posting this here. I think that the IRS has got itself into a right mess. While the Duke is obviously a mistake on the IRS’s part, what about his US citizen wife? He could still be in big trouble due to FBARs if they haven’t done that correctly and have lots of joint accounts (which I am assume that they do).
Gave me a big headache though to read this. If I were a foreigner considering studying or investing in the US or marrying a US citizen I would certainly think twice after reading this! I don’t think that the US understands the real extent of the damage that is being done.
@Roger Conklin
So could the current Prince of Monaco, Albert II! They could argue that his mother Princess Grace relinquished citizenship and had it restored involuntarily later on. Other interesting people with US connections who probably won’t be touched: Dominique Strass Kahn’s wife was born in the US and so Queen Noor of Jordan. DSK’s wife is still a US citizen the last time that I heard. Boris Johnson, the mayor of London, claims to have renounced citizenship a couple of years back but I don’t think he ever legally did it correctly.
http://www.boris-johnson.com/2006/08/29/american-passport/
@Everyone: They are not going to get it until Kenya and Indonesia claim the President of the United States as a “Kenyan Person” or an “Indonesian Person.”
Actually, we all know the President’s political opponents have already tried to do just that. But, if those countries where he has ancestral or past connections would actually do it, maybe the President and his supporters would finally wake up.
http://www.forbes.com/sites/robertwood/2012/02/25/expats-lobby-for-tax-on-residence-not-worldwide-income/
Expats Lobby For Tax on Residence, Not Worldwide Income
@Roger and Others:
Winston Churchill would likely say to IRS what he said in 1903: “We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Or, maybe WC would just keep it simple: “There is no such thing as a good tax.”
To Isaac Brock Society, Sir Winston would likely repeat these words: “Never give in, never give in, never; never; never; never – in nothing, great or small, large or petty – never give in except to convictions of honor and good sense”
To Congress, Mr. Churchill would express his confidence in USA: “You can always count on Americans to do the right thing—after they’ve tried everything else.”
Caution here – WC was not most famous for his grasp of economics, and was personally in debt for most of his life.
@blaze and p331t, Sir Winston would have been in far worse shape than he was if he had, being the US citizen as he was born abroad to a US citizen mother, if he had also been subject to US intome tax on his salary as Prime Minister. But fortunate for him, the US Congress by the Tax Act of 1962, signed into law by President Kennedy, had not yet started to tax US citizens resident abroad. It was very limited to the very wealthy at first, but with the Tax Reform Act of 1976, it subjected the middle class to double taxation with a vengeance. That was the year the US trade balance was transfromed from a surplus to a deficit as hundreds of thousands abroad threw in the towel and came back home in order to survive. The Cumulative US trade deficit which started in 1976 now exceeds $8.5 trillion, and is increasing by $2 billion per day. That is up from $1.5 billion/day when President Obama launched his Export Initiave to double US exports in 5 years. Yes, exports are up, but imports are up even more.
But to be fair his Export Initiative did not include as an objective a reduction in the US trade deficit.
@Roger
You know, this brings up a really interesting question. Lots of British Lords married rich American heiressess up to the Second World War because they needed money to finance the repairs and maintenance of their great manors. Winston Churchill is the most famous example of somebody affected, but what about those with a US-born heiress parent who moved to the UK a generation ago? There are perhaps a good number of people in the UK with US-born parents who are now automatically considered “tax cheats” and US citizens even if they never registered as such and who are still alive. It will be interesting to see if the IRS actually goes after any of them.