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.
Wapo chimes in. At least somewhat less biased than other US media:
http://www.washingtonpost.com/blogs/worldviews/wp/2014/11/29/london-mayors-unpaid-tax-bill-shows-why-some-people-dont-want-to-be-americans-anymore/
http://m.bbc.com/news/world-europe-30248309
Another example of potentialfits discrimination against a group of people in the UK. This time restricting benefits to newly arrive EU immigrates – Cameron expects legal challenges. Is FATCA any different?
@Brockers, Riddle me this……Boris is a British Citizen resident in the UK.
The USG says he owes lets call it $200,000 USD in capital gains tax, penalties and interest.
Under this foreign law, Boris does not have a leg to stand on but it is foreign law to Boris.
I would assume Boris has no assets in the USA. If he did they could put a lien and simply take the asset.
Under “THE MULTILATERAL CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS” the UK will not assist the US on matters of collection so Boris can not have UK assets liened against.
In May he will run for Parliament which is an expatriating act. Regardless of getting a CLN, that would put him in a position to answer NO in regards to FI FATCA questions in the UK.
As a MP, he would be able to get an Official Use UK Passport so he could travel to the USA on UK Government business and the USA would be hard pressed to do anything.
It gets sticky because he has written books that are being sold in the USA. I would guess the USG might be moving to have payments on those book sales held back in favor of the USG.
Other than losing the book money, it appears he can say pound sand to uncle sam and there is little they can do. I would guess that he would gain politically in the UK by telling the US to pound sand because he is British.
Any other thoughts?
Nigel Green on the BoJo controversy:
http://www.nigel-green.com/2014/11/29/boris-johnson-still-refuses-to-bow-down-to-fatca/
@ George
I seems unlikely that US could get any piece of Boris Johnson’s Churchill book sales. There is considerable process that would take place first before a tax lien could be placed against BoJo’s assets in the US – and such a lien would only apply to his personal assets, and only be realistically enforceable in the US.
The book is actually sold by its publisher, and the revenue belongs to the publisher. It is British firm Hodder and Stoughton. So any earnings distributed to BoJo would probably be in his home jurisdiction of the UK. It sounds like he has already been paid substantially for the book because it was a commission, as per H&S’s website:
“Hodder and Stoughton have commissioned Boris Johnson to write a book on the character, life, legacy and meaning today of Sir Winston Churchill, acquiring World volume rights through Johnson’s agent, Natasha Fairweather at AP Watt at United Agents working in association with Gordon Wise at Curtis Brown, representing Churchill Heritage.”
BoJo’s literary agent is also British: “Founded in 1875, A P Watt is the oldest literary agency in the world, representing some of the foremost British and Irish writers of the 20th Century. ”
My understanding is that non-fiction books like these are not expected to make a lot of money initially for the author, especially if the author received an advance payment as part of a commission.
I expect the publisher would vigorously defend any attempt by the US gov to confiscate revenues from a book written by the British citizen Mayor of London about one of America’s most stalwart allies. Such an action might be good publicity for the book, especially in view of the primacy of the 1st amendment guarantee of “Freedom of the Press”.
Aren’t the executors of someone’s estate given the responsibility of paying all outstanding tax liabilities? When Boris dies, someone is going to ‘inherit’ his problems with the IRS. Boris can ignore them, but can he reasonably expect anyone else to? US citizenship, the gift that keeps on giving.
Jack Townsend has posted the WAPO story about Boris. It may be worth asking Jack’s opinion on what he thinks the USG can realistically do with regards to collection efforts against Mr. BoJo.
http://federaltaxcrimes.blogspot.com/2014/11/wapo-article-on-expatriate-taxation.html
@Wondering, thanks for that. So it appears Boris is noncollectable and can tell them to pound sand.
@Bubblebustin, “Aren’t the executors of someone’s estate given the responsibility of paying all outstanding tax liabilities? When Boris dies, someone is going to ‘inherit’ his problems with the IRS. Boris can ignore them, but can he reasonably expect anyone else to?”
I assume that the heirs of Boris are rightly British Citizens resident in the UK. Remember we are talking about FOREIGN LAW of a FOREIGN COUNTRY.
There is no UK Law nor a UK US Treaty that permits the US to collect in the UK.
I like Boris and pray he lives a long life. Having said that his executors will settle the estate according to and solely under UK Law.
I expect his UK Executors to faithfully follow ALL UK Laws in settling his estate and EXPECT and DEMAND that HMRC makes sure his estate is properly settled according to all UK Law and HM Treasury gets it tax.
In the buildup to FATCA we feared the Emperor with the mighty hand of Caesar.
Almost six months after 1 July, it looks like we are staring at the Emperor with not a stitch of clothing and its not a pretty sight.
Grant you, US Citizens who are “American Citizens Abroad” do in fact have a problem. But those who do not consider themselves American Citizens and do not consider their house to be a second home abroad are coming to the facts of life which is to tell the naked and shriveled up old emperor to pound sand.
Canadian Citizens in Canada are being inconvenienced, subject to discrimination and rightly pissed off but other than that the emperor is stark naked.
@Bubbles, if Boris gets in too deep he may have difficulty entering or more likely leaving the US after entering.
Hence Boris would have to avoid traveling to the US on anything other than a UK Government OFFICIAL Passport issued to members of HM Government for official travel.
The US does the have the right to pass any laws it sees as being fit, just as France may, Canada may, Korea may…….
Canada had the right to pass a law, a retroactive law that has likely made me a Canadian Citizen with all the rights and obligations of same.
Am I going to start following the laws of Canada as someone not resident in Canada who does not openly carry and enter third countries on a Canadian Passport? NO, Canada is a FOREIGN country to me regardless that they have bestowed Canadian Citizenship on me.
@Bubblebustin: My lawyer and my executor (who is also my accountant) assure me I have no obligation to adhere to a foreign law. They will not submit anything to the IRS in the settlement of my estate with solely Canadian assets.
I think it is safe to assume Boris will also take all necessary precautions to protect his heirs.
@Bubblebusting, Blaze
It is worth noting that while the Certificate of Death issued by licensed funeral directors and similar caregivers in Ontario (to officially record a death) lists “place of birth” of the deceased, the info website from the Ontario funeral directors notes that they will NOT provide a cert of death to any foreign state.
kermitzii, Evidently Roger Cohen is probably one of those naturalized US citizen liberals who believes in hitting everyone outside of the USA because they dared to move out of the “greatest country in the world” ~ barf~
As far as the 2cm in Vancouver. We got 5cm in Surrey…and the evening before yesterday, the roads were an ice rink. Had to pick up my wife from work… I said no to my son’s hockey game in Chilliwack. No way I was driving out that way with the roads the way they were.
Thank you for the advice that your received from your lawyer and executor, Blaze. That will ease the minds of many here that they can discuss this subject with their own lawyers and executors.
I, myself, have been very fearful to do so, that I put my son’s inheritance and “US citizenship-based tax problem” into hands that must turn his information over to the US. You’ve given me some courage to take this important step to discuss with the law firm that holds my will and my son’s discretionary trust instructions my family’s situation. If everything is properly in place for my son that I know the US will not be able to touch anything that goes for his well-being after I am gone, it will give me great peace of mind right now.
@Calgay: Do NOT discuss this with Roy Berg! Discuss it with a Canadian lawyer.
The law firm that holds my will is Calgary-founded and Canadian — though I now see this additional information from 2014:
Not paying you taxes is a criminal offence. England will extradite Boris to America because they have that agreement to do so under the circumstances. So I don`t believe the “go pound sand” argument at all.
@ George Are you aware that Canada provides for free renouncement of Canadian Citizenship if it was bestowed on you because of a change in their law in 2009? “Renunciation of Citizenship (for certain persons who acquired citizenship on April 17, 2009) (R7.1) – No fee” http://www.cic.gc.ca/english/information/fees/fees.asp It’s too bad the US can’t do the same for those of us caught in their law changes. Of course, Canada does not impose any penalty on you for having their citizenship and for those renouncing for other than this law change, the fee is only $100 Cdn.
@Bubblebustin and Blaze regarding how a Canadian estate will be handled upon death of a “US Person”. You both show how important it is to have a lawyer/executor who is knowledgeable on this matter.
@George
Would the IRS have any jurisdiction over Johnson’s acting executor if they entered the US? I suppose, though, that they would be barred entry under the circumstances…
@The Animal
According to Wikipedia, Cohen now resides in London.
@Polly – basic principle of extradition law is that the offence for which extradition is sought must be an offence in the requesting state AND the sending state. Were Boris to be arrested in Eritrea, he might have a difficult time of it. Otherwise, he owes no tax under UK law nor is there any obligation under UK law to file tax in a foreign jurisdiction for earnings in the UK. Stated differently – the only income for which the US could claim he failed to file a return is income in the UK and he has fully satisfied tax on it. No country – including the UK – requires tax returns to be filed other than in the country of residence or earning (usually the same). The same thing cannot be innocent in one place and guilty in another and be the subject of extradition absent some very particular clause in the treaty (and I am quite confident the UK has not got a tax extradition clause with the US).
As I have written earlier in this thread – Boris was very, very badly advised when he took out a US passport. He almost certainly relinquished fifteen years ago when he was first elected to Parliament. He was a bit gullible and trusting in following the stupid advice the US immigration people gave him (i.e. that he NEEDED a US passport to enter the US). All he had to say was “relinquished” and he would have been done with them.
Having applied for a passport, he will now need to go back and explain why he innocently but mistakenly followed the advice of the US Embassy in London in getting a passport, not realizing that he already had his “get out of jail free” card in the form of his MP’s passport. He doubtless knew that being elected MP in the UK would cause him to lose any other claim to citizenship and nobody made him run. In short, he had a relinquishing event and sufficient intention to satisfy the statute but allowed the US Embassy to talk him into believing that he did not. He should return his passport to the Embassy forthwith along with a letter saying that it had been issued to him in error due to his mistaken belief (induced by the Embassy) that his election somehow did NOT cause him to lose US citizenship as he fully expected that it had.
Every country really ought to erect large posters or billboards outside US consulates and embassies: “Warning – you do NOT have to accept a US passport if you are a citizen of this country. Applying for a US passport may subject you to serious financial or even criminal penalties now or in the future which this country may not be able to protect you from. Your ability to earn a living, marry the person of your choice or move to the country of your choice may be adversely affected. Please consult a (non-American) lawyer before entering this building”. Anything short of that warning (which the US should be honest enough to post on its own instead of tricking people into applying for unwanted, unnecessary and harmful passports) would invalidate any allegation of “free choice” in accepting a US passport. It is not free choice if it is uninformed.
Boris – get out while you still can!
@Annefrank
Tax evasion is a crime in these countries. I know that Germany will extradite somebody who is avoiding taxes in America from Germany back to America. Why should England do otherwise? Only Switzerland as far as I know- has the option (for now) to not do so because tax evasion is not considered an extraditable crime there. But not paying your taxes- similar to murder- is a crime most countries will condemn and extradite the “criminal” who does so. This is what little I know about the law – but I have researched it and if this is true for Germany- then it will be true for America`s even greater ally, England.
Maybe I haven’t explained myself well enough above, but tax evasion is considered a crime in Germany and England. A major crime. Its not about whether Boris owes taxes to England – but about the fact that owing taxes to America and not paying up is considered a crime in both nations because it is deemed tax evasion.
@Polly, “but about the fact that owing taxes to America and not paying up is considered a crime in both nations because it is deemed tax evasion.”
Owing tax is not a crime in the US or the UK.
Evasion is what is a crime and there is a major difference.
The owing of tax is a civil matter and is persued as a civil matter under law in the USA.
@Polly, the US UK Extradition Treaty is here;
http://www.statewatch.org/news/2003/jul/UK_USA_extradition.pdf
Key provision;
“1. An offense shall be an extraditable offense if the conduct on which the offense is based is punishable under the laws in both States by deprivation of liberty for a period of one year or more or by a more severe penalty.”
and
“4. If the offense has been committed outside the territory of the Requesting State, extradition shall be granted in accordance with the provisions of the Treaty if the laws in the Requested State provide for the punishment of such conduct committed outside its territory
in similar circumstances.”
Ditto what @Anne Frank wrote…..
@ Anne Frank
I’m afraid to ask but ask I will. Can someone who is a Canadian citizen (since birth) but deemed to be a U.S. person (for tax purposes only) by the USA be extradited from Canada to the USA? Right now it’s inconceivable that this would happen but it looks to me as though laws on both sides of the border can be morphed by political motivations.
@The_Animal
We’ve got 50+ cm of snow with an ice rink at the bottom. The Friday night snow came with high winds and the Saturday night clear skies came with -36C temps. We’ve got 2 more days of shoveling to become mobile again. Wanna trade?
@George – I would bet any payments would be out of the reach of the US Govt. Boris would simply be paid by the publisher’s UK company. So as long as he stays an MP and gets paid by the UK company, the US is going to find it expensive and troublesome to get payment.
It would be groundbreaking for the US to freeze foreign assets for someone in Boris’ situation.