Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 369 Comments

Read the complete article here.

It includes:

Boris Johnson has revealed that he is refusing to pay a tax demand issued to him by US authorities – despite previously lambasting the US embassy in London over its failure to pay the congestion charge.

The mayor of London, who was born in New York and holds a US passport as well as a British one, visited the country last week to promote his book and said during an interview with NPR (National Public Radio) that he had been hit with a demand for capital gains tax.

He said the US demand related to his first home in the UK, which was not subject to capital gains tax in England.

And for the absolute and total U.S. hypocrisy:

Johnson has continually pressed the US embassy to pay unpaid fines it has incurred for the congestion charge. The embassy has refused to do so, claiming the charge is a tax and therefore its diplomats are immune. During a visit to the UK by Barack Obama in 2011, Johnson reportedly asked him for a £5m cheque for unpaid congestion charges but the US ambassador intervened before the president could answer. By last year the amount the US embassy owed in congestion charge fines had risen to more than £7m, the most of any diplomatic mission in the capital.

369 thoughts on “That @MayorOfLondon is a good man but he still suffers from the U.S. taint which is “very difficult to give up.””

  3. @noone, I would guess somewhere along the line he was put in touch with a compliance condor.

    He had a valid relinquishment and all of this would have gone away. Regardless of talk of him running for POTUS in the USA its never going to happen.

    It was insane of him to get a US Passport having a valid relinquishment.

    I would guess that he started filing after the passport fiasco in 2006 and then someone did his return and either showed he owed tax but said they would have to collect or he was audited.

    In order to get a passport he needed a SSN, so it went downhill from there.

  5. @George, concerning your comments of December 1st, 11:15 a.m., 12:26 and 12:40:

    Thank you. You speak of a sane and rational world, one of which I have glad memories. I want very much to believe it can still be so….

    Breaking news suggests, however, an increasing frenzy among national governments to join in the “grab-whatever-we-can” by criminalizing foreign assets even when they are held with no criminal intent. In today’s news, Russia is reported to have just done so; and in the UK the Autumn Statement by the Chancellor is expected to include an automatic criminalization (with strict liability) of not declaring overseas assets and income where any tax would be liable.

    See: http://citywire.co.uk/wealth-manager/news/tax-crackdown-perfect-storm-brewing-for-undeclared-offshore-assets/a785926

  7. @All Do we actually know that Boris has filed returns or that IRS has demanded anything from him.

    My sense was he gave the capital gains on his London home as an example of what he would owe if he tried to renounce.

    From there, it has become international news, but I do not know if Boris even has a SSN.

    He does however have that US passport which he got under some threats that he could not enter US unless he had one. It’s all very nasty, but my prediction is IRS will not actively pursue him if he keeps his mouth shut–which a lawyer has likely advised him to do.

    I’m sure he is not looking forward to any more trips to the US.

  8. Michael DeBlis argues that Boris Johnson is not liable for capital gains tax on the sale of his home as he did not meet the substantial presence test. Really?

    “Under Article 13 of the U.S.-U.K. tax treaty, Mayor Johnson is not liable for paying U.S. capital gains taxes on the sale of his home. Of course, that does not mean that he gets off “scot-free.” On the contrary, he must still pay taxes on the sale, but only to the U.K. government. Therefore, the mayor seems to have a ironclad argument for overturning the IRS’s proposed assessment of capital gains tax on his primary home.”

    http://taxconnections.com/taxblog/london-mayor-pushes-back-against-the-irs-for-outrageous-tax-assessment/#.VICE8Ig76rU

  9. @Blaze December 2, 2014 at 4:47 pm
    “@All Do we actually know that Boris has filed returns or that IRS has demanded anything from him.”

    The simple answer at this time is – No, we don’t know, nor are we likely to ever know. Boris, the IRS, and the US Embassy in London have all refused to comment further. The main stream media have gone quiet, and only the tax professional sites are carrying on with any further mention (as above). The one chance of the story reappearing lay in opposing parties making this an issue in the upcoming Uxbridge and South Ruislip election for the Member of Parliament of the constituency in 2015. (Tempting???)

    There are some interesting questions being posed, for example, from this on a tax professional site:

    http://www.taxjournal.com/tj/articles/boris-us-tax-evader-or-just-naughty-boy-26112014

    “Back in 2012, Boris wrote in The Spectator that he is happily ‘the proud possessor of an American passport’….”
    “Boris’s accountants wrote publicly in 2012 during the last Mayoral election campaign that Boris ‘is liable to income tax on the entirety of his income and has made all due payments’. It seems curious that Boris could have paid all tax due by 2012, as he is still annoyed today about a liability on something that happened in 2009……….”
    ” He appears to have an outstanding US liability…….Did he perhaps take professional advice that he received and acted on telling him that he was not required to file or pay tax in the United States?……”

    He did file a disclosure of “tax paid” following a confrontation at the time with his rivals, and yes, Boris did pay a “lions share” of his income to Her Majesty’s Revenue and Customs. 40%, to be exact; and much more than he would have been required to pay had he used “other methods” as employed by rival candidates.

    http://blogs.telegraph.co.uk/news/andrewgilligan/100149482/boris-johnson-brian-paddick-and-jenny-jones-release-their-income-and-tax-paid-wheres-yours-ken/

    We also know the accounting firm which made that disclosure for Boris:

    http://www.accountancyage.com/aa/news/2165931/boriss-accountant-speaks-livingstone-tax-clash

    Whether this was a firm hired simply to release the disclosure, or his own personal accountancy advisors, isn’t clear. The article appears to suggest the latter.

    The betting is still that under normal circumstances, the amount of tax paid to the UK would offset any tax due to the US, especially in the hands of a good (aggressive) accountant. The disaster was the inability to offset a capital gain on the sale of the primary residence since no UK tax is due.

    It still seems logical a good accountant should have known this. As mentioned earlier, we will probably never know the true story of how the assumed liability came about, and how it will be resolved, save Boris’ name appearing in the official list as someone who has renounced US citizenship; or given the delicacy of the situation, would it ever appear?

  10. http://www.telegraph.co.uk/finance/personalfinance/tax/11077310/No-Isas-for-Americans-Post-Office-overreacts-over-hated-US-tax-law.html

    “….it emerged that well in advance of Fatca applying in Britain the Post Office introduced terms barring US citizens from opening Isas. HMRC rules make Isas available to all UK residents, regardless of citizenship.

    Among those who would not have been able to take out a Cash Isa with the Post Office is Boris Johnson, the Mayor of London, who was born in New York and holds a US passport. …”….

    …” Other innocent Britons are also caught up if they own trusts, for instance. It appears the Post Office was adopting this approach – even though Isas should not fall under Fatca’s reach.

    Following our questions the Post Office has changed its stance.

    It said it had “decided at first to be cautious” but would now “allow US citizens to apply”. It added: “We would like to apologise to any customers with dual citizenship who have been unable to open a Premier Cash Isa at the Post Office.” …”…..

  12. US Ambassador Barzun defends US corporations avoiding UK taxes, says the US Embassy shouldn’t pay UK taxes, and concludes by insisting the Mayor of London should pay US extraterritorial tax:

    December 9, 2014 11:38 pm
    ‘US envoy defends Facebook over tax and Rigby incident’
    Kiran Stacey, Political Correspondent
    http://www.ft.com/cms/s/0/a069e046-7fb4-11e4-b4f5-00144feabdc0.html

    Mr Barzun defended his embassy’s policy of not paying the charge, the payments for which have now mounted to more than £8m. He called the charge a tax, insisting that countries should not tax foreign embassies. But he was less forgiving of the situation faced by Mr Johnson, who admitted last month that he is being pursued by the Internal Revenue Service on the basis that he is a US citizen. …”

  13. @badger

    In the UK… they should change the wording… instead of congestion tax… call it useage tolls… so then the US embassy don’t have an excuse… they would then be toll beaters… That is what the US does… change the words a bit to get the most people they can… play the same game

  14. Just tweeted to US Ambassador to England (as BC_Doc@No_FATCA):

    “@No_FATCA: @MatthewBarzun Quiz time: What benefits does London mayor get from his USC? He hasn’t lived in US since age 5? Remember, rights aren’t bens.”

    I’m not holding my breath for a reply…

  15. And one more:

    @No_FATCA: @MatthewBarzun Citizenship based taxation is a tax on ex-pats rights. No benefits provided to ex-pats. End #CBT End #FATCA

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