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.
@ Tricia
RE: your NPR comment
That was an impressive computation you did. Bet you aced those exams awhile back. And we know that with the added FinCEN, 8938 and who knows what else penalties, poor Boris could end up tearing out most of his erratic blond locks. Outrageous indeed! I wish he hadn’t silenced himself. We need a lion’s roar to wake up the world. (BTW, I finally remembered my NPR password and popped in a comment too.) I’d say the Brock hornets did pretty well at NPR today.
One of the many problems we ran into during the 3 years it took to go through OVDI was ability to claim any refunds once the time allowed to claim them has expired. I’ve also learned that the IRS can shuffle years around if they want to. They can probably do a lot of things to benefit the taxpayer if they want to or have to.
@Bubblebustin
His blatantly willful conduct, that’s what!
Plus that one figure for tax on earned income is only for one year. For arguments sake, let’s assume he makes exactly the same for the 5 years he would have to certify, not counting interest for being late & not counting investments etc, he would owe a whopping $1,014,005 just for the earned income. And lets say they put in $100k in improvements and he would get to take off $50k= $272,144 @15%=$40,822.
So now we are at $1,054,827. And of course, add the condor fees. Again, figure is too high but just to get an idea of how outrageous it is……..
House sold in 2009 so outside the 5 years should he renounce early 2015 (2010,11,12,13,14). It wouldn’t be worth it to add an extra year of his income in order to make it appear as if he’s trying to evade the tax on $40+k
This man is in a pathetic situation, no ifs-ands-or-buts………
Well you’re the accountant, Tricia 🙂 thanks for coming up with those figures.
Our Boris is a shining example of an accidental American whale, who the more he tries to swim away from the net, the bigger he gets. I don’t see how he can evade the IRS and still remain in office. The situation is truly dreadful for him. I wonder how he deals with it without the Isaac Brock Society!
@Tricia
Do you know the FBAR rules regarding a mayor with signing authority in a municipal corporation?
CNN’s got ahold of the BoJo story now. Trying to keep my BP down so won’t even read the usual homelander comments. Great headline to get their juices going:
London mayor refuses to pay US tax bill:
http://money.cnn.com/2014/11/21/news/london-mayor-us-tax/
@Charl,
I don’t think a mayor would normally be the person with signing authority. Generally treasurers and people in Finance dept who nobody ever hears of would have that duty.
Will go back and take a close look at the regulation.
@EmBee & bubblebustin
Thnx and no Embee I did not (corporate tax…ugh). I am not an accountant tho I may end up being a tax geek…I am really beginning to scare myself….
I just thought some numbers would help show how utterly obscene this is….I cannot imagine even an idiot coming up with a way to justify taking that kind of money from someone who simply is not a citizen in any sense one would normally entertain.
CNN? I’m with you bb…don’t even want to begin with that level of garbage and rot talk…
The capital gains tax was 15% in 2009, now 20% to which an additional 3.8% Net Investment Income Tax may be added.
For Mr, Johnson we may assume joint owned. So taxed on 50% of the gain with $US 250,000 exemption of gains.
To the IBS “SWAT Team”: Great swatting out there the past couple of days on these various Boris articles!!! You can bet that for every unthinking idiot who says Boris should “pay his US taxes cuz it’s the law” there are several others who have read the discussion soberly and learned something they didn’t know about their country. One by one by one we will recruit people to our cause. Again, well done, swatters!
@Tricia @JC
I’ve been reading a bit about 1031 exchanges, and could a US taxpayer designate a home in the UK or Canada as a principal residence for UK tax purposes and as an investment for UK or Canadian tax purposes, respectively, as long as you meet the criteria for both?
sent by a friend in the UK:
Is Downton Abbey popular on Canadian TV? There is now some discussion about the tax consequences of Lady Grantham being American.
A blogger on uk-yankee.com writes
http://talk.uk-yankee.com/index.php?topic=84204.15
I can see the Christmas special now:
Cora decides to be Mayor of London, but there is a question about her citizenship. The Americans are still upset that Lord Grantham extricated Cora’s brother Harold from the Teapot Dome Scandal; Tom emigrates to Boston, and under pressure upon arrival at Ellis Island, blows the whistle on her not paying US tax; the Americans get up in arms and threaten Lady Grantham; The Dowager and Lord Merton petition their acquaintances in the House of Lords to declare war on the US; the Americans overreact and a secret US spy organisation pressures Scotland Yard to turn over Anna as an informant; and the show ends with Anna being put on a boat to Cuba…
Thanks for the link Tim – though I’m not sure the comment from the person suggesting I go kill myself really helped promote your point of view…!
For the Downtown Abbey Fans, which I’ve actually had lunch in Highclere Castle where it’s filmed outside of Newbury, Berks, just go to http://www.vpnuk.net, pay the £6 a month, use the VPN and get access to BBC, ITV, Channel 4 & 5, you don’t have to wait around for the PBS or CBC.
Mark Pack,
Such a comment is ugly and unfortunate; there is no way around some of the ugly comments VS a real discussion by commenters. I (we) hope you will delve into this subject more to show the many who are US collateral damage as they are chattel / slaves of US citizenship-based taxation — many having never received education on the subject at all until now. Consider and put yourself into the shoes of an “Accidental American” (as is Boris Johnson), most not famous or wealthy. Incidentally, there are rights under law that the US chooses to ignore, the Master Nationality Doctrine which is part of the fabric of international law.
In the case of “Accidental Americans” they are “US-defined” dual citizens, having had no choice (or claim to that citizenship) as adults (and with “requisite mental capacity”). They had no choice where or to whom they were born – they returned to their and their parents’ own country with their Canadian parents as infants or children.
For U.S. citizenship to be just for these U.S.-defined “dual citizens”, they should have had a CLAIM (and lapse of that possibility if not claimed), especially that the U.S. practices citizenship-based taxation and these persons had no control of the CBT consequences of their U.S.-defined U.S. citizenship in their own country (Canada) that practices residence-based taxation.
The same unfair consequence is true for children born to U.S. parent(s) in Canada, their birth never having been registered with the U.S.; they never having lived in the U.S.; they never having had any benefit from the U.S. – only the consequence of, again, U.S.-defined U.S. citizenship in their own country that practices residence-based taxation. I have an adult son who is entrapped (as many will be) by a developmental disability so ‘not requisite mental capacity’ to renounce a US citizenship not asked for and for which there has NEVER been any benefit as he has only ever lived in Canada. A parent, a guardian or a trustee does not have the right to act on behalf of such a person, even with a court order. Any country who would entrap a person such as this into a US citizenship with all of the consequences and yearly expense (with no tax usually owed) thinks itself entitled and better than all other countries of the world who practice a more fair residence-based taxation.
With the consequence of U.S. citizenship-based taxation, it should only have been a CLAIM to U.S. citizenship or lapse of that if not claimed. If the U.S. practiced residence-based taxation as the rest of the world (save Eritrea), these persons would not have unjust consequences of citizenship bestowed upon them without their choice, without their consent, without their claim to such, given the facts. Boris Johnson had the further entrapment of having to travel with a US passport as he was born in the US (leaving as a five-year old who had no say in the matter).
In the meantime, those who care about sovereignty and the rights of ALL Canadians under Canadian law, including the Charter of Rights and Freedoms, will continue raising the needed funds for litigation in our country. The US has litigation in the works as well. Hopefully, other countries will follow. Why should we roll over to becoming second-class citizens in our countries with US law over-riding our own country’s laws? Would you just roll over for such, Mr. Pack?
If you wish to educate yourself further on this matter, here are some useful links from both sides of the Canadian / US border:
http://www.adcs-adsc.ca/ (Alliance for the Defence of Canadian Sovereignty)
or even, from your fellow “homelander” who “gets it” in http://taxfoundation.org/blog/fatca-automatic-information-exchange-and-end-financial-privacy
@Bubblebustin
Not sure I follow. Do you mean the same home with two different designations at the same time or switched designations at the time of transfer?
Something a tax lawyer or accountant might be able to determine, that’s why I asked Robert Wood. He thought it was a good idea, but seems to think that the IRS wouldn’t allow someone to get away with it. What business is it of theirs as long as you are also tax compliant in the country where you live? This is a relatively new phenominen – Americans abroad realizing they are on the hook for taxes on the sale of their homes, so I’m sure all the angles haven’t been worked out. If the US can double tax us, what’s to stop us from receiving legal tax avoidance all other US taxpayers enjoy?
I hope Robert’s ruminating over it.
@Bubblebustin,
Could you please describe a little more fully what you mean? You are talking about designating a principal residence in a country which does not tax capital gains on the sale of and then, trying to defer the US’ capital gains tax by a type of rollover designation?
Yes, Tricia. Robert Wood wrote about 1031 exchanges in 2010, but not in connection to non-residents.
http://www.forbes.com/2010/01/26/capital-gains-tax-1031-vacation-home-personal-finance-robert-wood.html
@Calgary411, I disagree that only those who CLAIMED US CITIZENSHIP should be US taxpayers. Focusing on who claimed it and who didn’t is confusing the problem which is TAXATION BASED ON CITIZENSHIP. First of all, technically, you don’t CLAIM US citizenship – you either are or you are not according to rules beyond your control.
Second, virtually NOONE, had a clue until FATCA, that USA was unique in the world with its byzantine laws equating citizenship with taxpayer status. I am sure that there are MANY PEOPLE who at one time thought they were LUCKY to have been born on US soil, and would happily have CLAIMED it formally (if this was a requirement to be considered a US citizen) who would NEVER HAVE WANTED TO DO SO if they had known this would make them US taxpayers.
My point being that (and I suspect George will disagree with me) the problem is NOT the US citizenship that is bestowed on us (whether unwillingly, or unbeknownst to us, or not), or whether we considered ourselves lucky to be dual (does ANYONE ANYMORE?), it is taxation based on this thing called ‘US personhood’ which can mean anything the USA wants it to mean which is the problem.
TAXATION SHOULD BE TIED TO RESIDENCE ONLY. YOU LIVE THERE, EARN THERE OR SOME COMBINATION OF THE TWO (RULES WILL AND DO VARY BY COUNTRY) THEN YOU PAY TAXES THERE. Sorry for the caps – I hate when people do that!
@Calgary411,
Just to be clear, I am not saying that you think claiming US citizenship is justifcation for taxation, just saying that the root cause of our mess is not US citizenship – it is US citizenship based taxation.
@Mark, There are nasty people everywhere (even some who frequent Brock, and who hate what USA is doing with its FATCA witch hunt). Please do not let one out of line comment give you the impression that our cause is not just.
You’re right, WhiteKat, you cannot CLAIM a US citizenship. That is what I say is very wrong as it entraps people — you, and more so, in my mind, those like my son who have no way out of their gifted US-defined US citizenship — (and others like both of you) born either in the USA to other-country parents who return to their parents’ country as infants or minor children OR those born in a country outside the US to US parent(s).
How much more fair if that gifted US citizenship would be null and void if the person did not choose to claim it when of age AND of requisite mental capacity. If there is such a horror as US Citizenship-Based Taxation, then no one — either you or my son or others like you, should be entrapped into a US citizenship. How much more fair for everyone would be Residence-Based Taxation, of course. But without that, if they want US citizenship and they have the requisite claim to such, do so / CLAIM IT — with full knowledge of all the consequences as well as any benefits one might have.
Saying that, it is just my wish; it, of course, is not the law, the reality.
Very few ‘US persons’ living as citizens of other countries, outside USA, would CLAIM US citizenship IF THEY UNDERSTOOD that this would make them US taxpayers. One would have to be mad!
And what about all those who consider themselves to be American, who have US roots, fond memories, and family ties still in the USA? They do not deny that they are US citizens, but does this mean they should be forced to renounce in order NOT to be considered a US taxpayer. Once again – this situation shows that it is NOT THE CITIZENSHIP which is the problem; it is the taxation based on citizenship which is the problem. This is why NO other countries do this. Even Eritrea, requires more than birth on Eritrean soil to be considered an Eritrean.
Maybe US should change its definition of citizen to include only people who RESIDE PERMANENTLY IN THE USA. Then they can keep their citizenship based taxation, because 6-7 million people will instantly no longer be considered US citizens.