From the BBC, we get official confirmation that Boris Johnson never followed through with his 2006 threat to renounce U.S. citizenship, but instead renewed his passport so that he could obey the formerly-wartime-only but now-peacetime law demanding that anyone whom the U.S. deems to be one of its citizens must use only a U.S. passport to enter the country:
Boris Johnson renewed his US passport in November 2012, the London Mayor’s aides have confirmed. The news came as a surprise to some. In a column for the Spectator in 2006 he said he was renouncing his US citizenship after being barred from using his British passport to change planes in Texas. But it appears he didn’t follow through.
For those of you who haven’t been following European news, Mr. Johnson is an American citizen who happens to reside in Europe so he can do some work for a city government in one of those allegedly-sovereign countries over there, while enjoying all the great U.S. embassy services and giving nightly prayers of thanks that the Marines will come sail up the Thames and save him from the clutches of the British government if he gets into any trouble.
Since I have no desire to imply that Mr. Johnson is anything but a law-abiding, loyal, and patriotic U.S. citizen — unlike some of these recent economic Benedict Arnolds who have been abandoning the Greatest Country on Earth in its hour of need — I am sure he has been dutifully filing Forms 1116, 2555, 3520, 5471, 8621, 8833, 8938, and whatever else the Homeland may ask of him for his offshore investments in the United Kingdom. Not to mention FBAR reports on all those municipal government accounts inexplicably held in offshore banks in London rather than patriotic banks in New York, so that the Financial Crimes Enforcement Network can make sure he’s not using those accounts for purposes of money-laundering or drug-dealing or Cuban-rum-purchasing.
But in the extremely hypothetical event that Mr. Johnson is not up to date on all his U.S. tax and anti-money-laundering obligations, well, the IRS has his number: even if they don’t listen to the Beeb, pursuant to 26 USC § 6039E the State Department has forwarded Mr. Johnson’s Social Security Number and other identifying information to the IRS. And in this highly unlikely situation, of course the IRS will show Mr. Johnson no favouritism at all due to his position, but rather will make sure to levy 12,900% fines against him if they find any two or three-digit annual tax deficiencies. And if the IRS decides that Mr. Johnson was actually willful in failing to file FBAR reports and should thus be fined several multiples of London’s annual budget, Her Majesty’s Revenue & Customs will show an equal lack of fear or favour in executing a mutual collection assistance request, and swiftly seize the required funds.
Fortunately for Mr. Mayor, the U.K.–U.S. tax treaty of 2001 actually addresses some of his problems, to make his process of U.S. tax compliance all that much easier — after all, he’s an important government official, not a Canadian trying to evade U.S. taxes by sneaking funds into a Canadian disability savings plan. Specifically, Article 19 ensures that his entire salary and pension is exempt from U.S. taxation. And his non-government income amounts to nothing more than “chicken feed”, as he puts it. So I guess the $743 million the U.S. claims it can raise from revoking expats’ passports is going to have to come from someone else’s bank account.
In conclusion, Boris Johnson for President! (Or at least Commerce or Treasury Secretary!)
PLEASE, somebody send this to Boris!
If Boris doesn’t like the US Border, he’ll hate the IRS and FATCA. May suggestion for a UK poster on the M4 entitled ‘Hey Boris do you comply with FATCA?’ looks for interesting.
This is most interesting. Boris “renewed” his US Passport in 2012. Does that mean he had a passport in 2002, and thereby was in possession of a US Passport in 2006 when he was prevented from boarding the flight at Heathrow, and during the subsequent article published in 2006 where he “renounced” (sort of, but obviously not for real)? OR, did have a US Passport many decades ago, which lapsed, and has only now renewed it? And if so, for what reason?
Actually, I’d love to see Boris running for US President 14 years from now for the entertainment value alone. I can’t begin to imagine how the US TV network political shows/commentators would (could?) handle him.
Of course, one only has to hear Boris speak to realise how American he is.
I’m not a bit Boris fan, but I feel sorry for the guy. He would definitely be a covered ex-pat if he renounced and all because he was born in the U.S. and lived there for a few months.
In 2013, The Telegraph stated:
“During the (2012 mayoral) elections, Mr Johnson published a signed letter from his accountant showing he paid around 40 per cent in tax on £1.7million earned over four years,” (£1.7 million is over $2.6 million) so the IRS high-net worth unit will undoubtedly be interested in Boris’s investments.
@Publius
Assuming Boris was a dual citizen at birth, would he have to worry about the $2 million net worth/$150,000 past 5 year tax average for the Exit Tax?
Boris could be an ally on this. Any ideas as to how to grab his attention?
For starters, Calgary411 how about writing him a personal letter and tell him your story?
Maybe a letter writing campaign for those in the UK?
Sure, George, I’ll do just that!
Feel sorry for Boris to be sure, He should have taken advice from a few people before putting his head in the jaws of that lion.
On a recent trip south a person in our party had a story similar to Boris’ (left as a child; raised outside US to non-US parents). Her eagle passport still had a bit of time to run on it but she used her brand new Canadian one to enter the US. A simply query raised “have you renounced?” to which a swift “yes” was given following which a US visa affixed to the Canadian passport of a US-born traveller. Next…
i think our neighbours to the south are distinctly of two minds. The State folks just want to know who’s in and who’s out of the club and don’t appear to worry too much about it – if you say “I’ve renounced” it looks like they make a note in some electronic file and that’s the end of it. My own relinquishment was about 30 years ago (before CLN’s and the like) and I have always entered with a Canadian passport without any questions asked. I must have fifty US visas stamped in my current plus various old Canadian passports I still have kicking around. From all the stories I’ve read here, the IRS folks want as many members of the club as they can get to put the sqeeze on ’em. Policies can change, but for now, i see no sign the US is closing its borders to naturalized former-Americans travelling from Canada. The person i was with, by the way, has never filed anything with the IRS and never will. Tried to figure it out and utterly gave up. Another minnow swims away instead of sticking around to be made sport of.
@George
“Boris could be an ally on this.”
I tend to doubt that. Boris is a staunch Conservative, and it was the Conservatives who snuck the IGA, via the 2013 Finance Act, through Parliament without a whisper. He would have to go against his own party and the Chancellor who promoted the bill. Although going against the PM, Cameron, might be to his liking.
I would suggest about the only person who might have the respect of the British people plus the public profile needed is author, Bill Bryson. Unfortunately, he has maintained sole US Citizenship and although he is very much an Anglophile, he has refused to take out UK Citizenship.
Due to “Parliamentary sovereignty”, the UK courts can not challenge an Act of Parliament through the judicial system.
http://en.wikipedia.org/wiki/Parliamentary_sovereignty#United_Kingdom
@OAP, if Boris was to bite it could help bring attention. But the counterargument attention might not be wanted as navigation routes are possible.
In regards to Parlimentary Sovereignty, this likely runs afoul of EU rules and the UK Parliament is often knocked over in EU Courts.
@Anne Frank……lots of US stamps is the documentation needed for the undocumented emigrant. 🙂
@George – “In regards to Parlimentary Sovereignty, this likely runs afoul of EU rules and the UK Parliament is often knocked over in EU Courts.”
Correct. The EU does not honour “Parliamentary sovereignty”, which is why any challenge would have to go through the EU courts and not the UK courts. Are there any MEP’s from anywhere in Europe who are US Persons?
@OAP
“it was the Conservatives who snuck the IGA, via the 2013 Finance Act, through Parliament without a whisper” True, but I suspect that was down to the belief that this was going to be a reciprocal arrangement, which, as many others have rightly pointed out that it will be realistically very unlikely. The whole ‘special relationship’ seems to have gone very stale in recent years, even amongst the Tories, the traditional supporters.
@OAP
I believe Boris would be covered. Victoria La Torre Jeker , an international tax attoryney, did an interview with Bill Yates, formerly of the IRS, about the Reed Amendment which included a story about an ‘accidental American’ banker in London who did not even realise he was a U.S. citizen and ended up a covered ex-pat. Boris has long known about his U.S. citizenship and held a U.S. passport.
The notwithstanding clause (bullet 4 in Article 1) gives the US the right to tax it’s citizens as though the treaty was not in effect. Therefore I don’t believe that Article 19 will apply in Boris’s case and his full government salary should be declared on his US tax return. He is in Form 2555, Form 1116 hell just like everyone else. And as his salary and income is rather large, he will probably run into AMT issues as well.
@CreatureOutside
“but I suspect that was down to the belief that this was going to be a reciprocal arrangement,”
Agreed. The brief moment (all of 5 minutes?) the IGA was discussed in Parliament, the Exchequer Secretary to the Treasury, David Guake, MP, discussed the two reasons the Government supported passage of the IGA. One, the report from HMRC that highlighted the banks/others reduced costs with the IGA in place, and two, the reciprocity issue (which of course we know is only so much hot air). Those were his only two comments. (I did have the link to the record, but alas, I can no longer find it.)
The passage also occurred at a time when the Government was introducing “the son of FATCA”, and rhetoric against tax evasion was running high. I suspect no one was about to sound off against any aspect of that particular highly visible PR campaign.
How to defeat a bad law? Parliament could pass another Act which nullifies the first, or as can happen in the UK, the agencies involved can simply ignore the Act. In this case, that means HMRC.
Badger posted a telling document several months ago that received no attention. It was a response from HMRC to the Parliamentary Select Committee regarding the fact that HMRC had notified the banks that reporting need not start on 01 Jan. 2014, but was to start on 01 July 2014 (The US Treasury/IRS position). The committee chastised HMRC for making the notification, saying it was the remit of Parliament to make official changes to the FATCA IGA, not HMRC’s (again, unfortunately, I’ve lost that link). It would seem Parliament is quite protective of the IGA.
Misguided? Obvious. The question remains; what individual either in government or from the public has the presence to have a determined Conservative Party admit it made a mistake. Labour? They went along with the IGA and chose not to question it at the time. The LibDems? They were in the government that passed the legislation. That leaves UKIP. For Nigel, this is the US, not the EU.
Over to any one else with any idea how to make this an issue in the UK.
To add: the number of ‘Accidental Americans’ now posting on the UK expat sites seeking either an explanation as to what is going on or seeking how to now solve their (OMG) problem, has increased significantly.
@OAP, do not forget that Cameron wanted a ride on AF1 and a chance to go to a basketball game with O.
Have spoken quite a bit with UKIP Party people who are disgusted by this when its explained. I have urged it be sent up the feeding chain.
Also working on Labour MPs. I actually joined Labour so I would have a voice on this issue with them.
With respect to Labour I am personally pushing that because the UK is a signatory to the 1930 Hague Convention on multi nationality that a British Citizen resident and domiciled in the UK can not even be considered anything other than British for FATCA IGA or anything else.
In regards to Accidental Americans, I too am finding real life examples in the flesh that are having an OMG moment. Ran into one who thought it was peculiar that when he went to open a new ISA account his existing High Street bank was all interested in that he was born the USA. He told me that he did not have any idea why. I referred him to IBS as his face went very pale and he said “Do you think I should close my accounts?”
@Publius
“an ‘accidental American’ banker in London who did not even realise he was a U.S. citizen and ended up a covered ex-pat.”
That is interesting, especially if they were a dual US/UK citizen at birth. I remember reading her articles, but the question remains how reliable is Bill Yates’ account of the situation. One would certainly like to know all of the accurate details. If it’s factual, then that may be the reason poor Boris has decided it is a tiger whose tail he can not let go of. Tina Turner was ready to retire. I don’t think Boris is. A significant dent in his (substantial?) assets via an exit tax may not fit in with his future plans. Therefore, maybe he’s decided to suck up the reporting consequences. That’s the reason I questioned in a prior post as to why the “renewal” of his passport. Is it linked with coming into compliance?
@OAP, I am scratching my head on Boris. He was the Member of Parliament for Henley from the 2001 general election until 2008. that was CLEARLY an expatriating act so he would have had a pre 1984 relinquishment in the bag.
Being an MP is certainly an expatriating event, although the qualifier “with intent” applies to it as well in the INA as I recall. Nevertheless, he had a simple way out which he appears not to have taken (likely due to bad advice). Probably not too late to send back the passport and claim error – I seriously doubt the US wants to try to be aggressive with a British MP and contender for the PM’s job (to say nothing of Mayor of London). I hate to wish ill-fortune on the fellow, but it might stir the pot in terms of getting attention on this ridiculous policy were the IRS to try to throw the book at him the way they do at retirees in Canada with 5% of his resources….
@Anne Frank, “(likely due to bad advice)”
Yep.
Riddle me this. If he was in full compliance do you not think he would have been prepared for that travel incident in 2006?
I would love for the USofA to go after Boris for FBARS et al. The press would be delightful to our cause. Regardless I think we need to get his attention on our plight.
@George – I feel sorry for the guy because he is getting pretty bad advice (assuming he is talking to someone).
The 2006 incident was actually not the government at all – per the piece he wrote about it, it was a Continental Airlines check-in clerk who denied him boarding. He never made it to the US. Under the rules airlines work under, they are responsible for repatriating somebody if they are denied entry. That’s why they do passport checks. Boris clearly got an over-eager and not very well informed gate agent in 2006. I doubt the border people would have sent him back had he been allowed to board.
The fact is that he has had an expatriating event every time he has been sworn in as an MP or Mayor. That would give him fifteen years out of the Gulag subject only to having wanted to be rid of his second passport. He may have thought he wanted to keep it on a lark, but I doubt his consent was informed (i.e. I doubt he had any idea what filing obligations and draconian penalties he was setting himself up for, even apart from the double-taxation that someone at his income level would doubtless be subject to). At this point, his best bet is sending back the passport and applying for a back dated CLN, pleading his own misunderstanding. If DOS had half a brain, they’d give it to him as soon as possible too as they risk creating a diplomatic incident that will look extremely bad for them.
As for compliance – I’d be willing to bet bid dollars that Boris is no different than anyone else who has lived their entire adult lives outside the US. He will have lived his entire life blissfully ignorant of how unique the US system is, won’t have dreamed of preparing or filing a second tax return and certainly won’t have ever heard of FBAR. At this point, “coming into compliance” would cost him his life savings (and whatever money he made before going into politics – he certainly won’t have made any since!). Given the penalties the IRS have been squeezing out of retirees who were trusting enough to enter OVDI, Boris could well create a precedent that will help cause the US to have to reexamine this rotten edifice. Sorry Boris – wouldn’t wish it on my worst enemy.
I never once thought that beach boy gave up his US citizenship 🙂
@Anne Frank, the real question is will his bank turn over the information and will he be reported under FATCA, or will his name be removed from the list?
I would be willing to bet that foreign governments will scan the data prior to sending it and remove unwanted information that they don’t want the US to see, such as politician’s names and associated data.
Intouchables.
@OAP
quick post before getting the kids to school, pls excuse grammar/spelling
“How to defeat a bad law? Parliament could pass another Act which nullifies the first, or as can happen in the UK, the agencies involved can simply ignore the Act. In this case, that means HMRC.”
Exactly. Remember ID cards? We were told it was for our own good and couldn’t get out of it because of the ‘contract’.
That law was overridden within days of the newly elected 2010 Parliament.
@NOONE, I would disagree and say that if you has an unambiguous place of birth on a financial account then they will ship his inofrmation off.
@Creature, thanks for the ID reminder. It does show how quick something set in stone can crumble. Though I actually wanted one of those ID cards to help with travel. They only showed city of birth.