New York-born London mayor Boris Johnson refuses to pay US tax bill http://t.co/MaKDcZnTnM via @guardian U.S. London Emb won't pay con "tax"
— U.S. Citizen Abroad (@USCitizenAbroad) November 20, 2014
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.
Johnson’s first mistake was telling the IRS he sold his house.
Maybe he didn’t tell them. Have you seen this?
“More Federal Agencies Are Using Undercover Operations http://nyti.ms/119ryrj IRS agents may pose as an attorney, physician, clergyman or ”
I think I see how this is going to play out. Boris will be given a get-out-of-jail-free card (relinquishment or renunciation with no exit tax or back taxes demanded), in exchange for which the US embassy gets its traffic fines dropped. Money-wise, the US comes out ahead.
Taxes are for little people.
He might have been able to claim gift of value of house to spouse over the years.
@Petros Johnson’s first act of defiance was to tell the IRS he sold his house.
& The IRS did not try and seize him, or block entry, when he was recently on US soil.
I’ve listened to that radio interview several times, and it’s not conclusive as to whether Boris has in fact already sold his house (at least not to me). We also don’t know whether he desires to remain a USC or not. He has looked into renouncing however, as he said the U.S. makes it very difficult to do so. We simply don’t know enough and according to this article, BoJo’s lips are herein sealed to the media about it.
Yes, we don’t know the details, but my suspicion is that the difficulty he is finding with relinquishment/renunciation is precisely the tax issue. He doesn’t want to have to pay back taxes or exit taxes, and quite rightly.
I was kind of hoping this burst of media attention to his situation would cause him to come out of the closet and openly champion our cause, but I guess he’s not feeling in quite a strong enough position to do that.
Noted that one of the comments to the Guardian article claims the Prime Minister of New Zealand is also a dual citizen with the US? Is this true?
@foo
As a US citizen, wouldn’t he be subject to back-taxes in whatever route he takes, other than becoming a resister? Don’t overlook the fact that there’s no statute of limitations on unfiled tax returns, so if he annoys them enough, the IRS could audit him back to his first paper route.
I think that unless Boris can find some way to back-relinquish (for lack of a better term) he’ll have to just bite the bullet and drive on as a US citizen or soon-to-be renunciant.
@Bubblebustin,
Yes, he has a back-taxes problem either way. Though if he had kept quiet about it, he probably would have been conveniently overlooked. Now that the red flag has been waved in front of the IRS, it will be interesting to see what happens. Maybe if the IRS does feel it has to pursue him now in order to save face, it will cause him to go into fighting mode. But I suspect he’ll be passed over in the end, and any agent pulled off his case will be reassigned to harass a little old grandmother in Toronto instead.
So I guess really the only thing he saves by keeping US citizenship is exit taxes.
Which may well be substantial in his case.
Well he is on the independent now.
http://www.independent.co.uk/news/uk/politics/americanborn-boris-johnson-refuses-to-pay-hefty-us-tax-bill-9874022.html
Poor guy.
The UK Labour party blasts Boris Johnson.
http://www.mirror.co.uk/news/uk-news/millionaire-mayor-london-boris-johnson-4665328
Petros is right.
Perhaps it is time for a lawsuit against the UK IGA. Boris will make a perfect plaintiff.
Boris is probably vulnerable to FBAR as well.
If the Republicans are smart, they will extend the FATCA Legal Challenge to include attacking CBT.
The root of the problem is CBT, not just FATCA and FBAR.
@FromTheWilderness
I don’t think that would solve his problem. I doubt Boris is being denied any accounts as a result of FATCA. His problem is Citizenship Based Taxation.
I love how the opposition politicians say that US tax rules are ludicrous, but rules are rules, and so are prepared to fillet Boris for not following them. Are they so willing to see the US surreptitiously suck money out of the UK economy in exchange for nothing? What does the UK get out of allowing the US to practice CBT extraterritorially? The deadbeats won’t even pay their traffic fees — which means more money out of the pocket of the average Londoner.
The UK needs to lodge some sort of formal protest over CBT, or get the US-UK tax treaty revised to eliminate the savings clause, or something. And double-check to make sure their DC embassy staff are not paying any taxes or user fees of any kind in the US. (Did they get a rebate on the Spanish-American War telephone tax that was only abolished a few years ago?)
@FromTheWilderness,
Didn’t see your last post when I posted. I see now you already made the point about CBT vs FATCA.
Please pardon this little aside here.
Boris was asked why he continued to carry a U.S. passport, and he said “It’s very difficult to give up”. I would bet that 90% of homelanders would think he meant it’s of too much value to give up. It would not occur to them that it’s more like chewing gum left on the footpath for someone to step on.
Robert Wood at Forbes says BJ is giving the IRS the finger.
http://www.forbes.com/sites/robertwood/2014/11/20/london-mayor-boris-johnson-politely-gives-irs-the-finger/
http://www.forbes.com/sites/robertwood/2014/11/20/london-mayor-boris-johnson-politely-gives-irs-the-finger/
Robert Wood is volunteering to help poor BJ. Gee, I sure wish ‘Mr, Wood would volunteer to help folks who are not well known millionaires.
@foo
As a US citizen, wouldn’t he be subject to back-taxes in whatever route he takes, other than becoming a resister? Don’t overlook the fact that there’s no statute of limitations on unfiled tax returns, so if he annoys them enough, the IRS could audit him back to his first paper route.
@Petros
Saying nothing may not made a bit of difference.
Depending on when or if Boris started filing, the 2009 house sale may have fallen outside of the three years for Streamlined, but would have red flagged his FBAR’s for 2009. I suppose the IRS could have chosen to not look deeper into an extra million bucks going into his account if they wanted to though. Don’t forget that I was in a similar situation.
Oops, foo, I didn’t mean to repeat myself there.
I wanted to say that Boris is a dual at birth and would not have to pay the exit tax as long as his filings are up to date.
If I find out that the IRS gives him a pass on capital gains on his home I’m going to blow a gasket as the tax bill we paid in OVDI on the sale of our home is not far off of his.
BJ seems to have taken to heart Churchill’s advice — will it work for him?
You’re right, Blaze. The media will follow the big names; lawyers volunteer to help them; those without the money or the name will continue to struggle.
We need to watch this well — if he should get a pass and those like bubblebustin’ pay, them’s fighting words.
Reason.com is on this now, saying “IRS is trying to mug” Boris. They say Boris is not the average pushover for the IRS “thugs.”
They ask the same question we do:
The question is whether Johnson, as a connected poitical figure, makes separate peace with the IRS, emphasizing that the IRS’s reach applies only to the powerless. That might have some interesting international ramifications. Or will he carve out a wider exception that gives others a little relief from America’s official muggers?
Or maybe the IRS will just exercise America’s imperial muscle and try to make even Johnson turn out his pockets to demonstrate its power.
Oops. I didn’t give the link to the Reason article. Here it is.
http://reason.com/blog/2014/11/19/us-government-tries-to-mug-the-mayor-of