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.
…and if there were a CLAIM to that US citizenship at maturity and with requisite mental capacity, the person so claiming US citizenship for whatever benefit he/she perceives has to research and understand what they are accepting (i.e., a signed contract accepted by both sides). No one would be blind-sided as Accidental Americans right now are.
They either
must know and CLAIM
or
not know and do nothing and that possible US citizenship and all of its consequences (as well as any benefits) goes away.
I guess you could call it
an OPT-IN
rather than
an OPT-OUT
as an Opt-Out comes with great financial cost and sometimes with entrapment with no way out for any cost, even with a court order.
I think ALL of us discussing this here believe that the best / the only thing that makes sense for us is for change to Residence-Based Taxation, rather than for whatever reason (no one has explained that to me sufficiently), the US-entitled Citizenship-Based Taxation that makes us all chattel of the US. I am saying that with the monstrosity of US Citizenship-Based Taxation, many are entrapped — some more so / more layers than others.
Common sense and simplicity could but does not prevail. Without that or the Master Nationality Doctrine allowed to take precedence, I think one maybe has to, for their and their families’ own protection, choose one citizenship or another with that new Berlin Wall keeping those who want US citizenship within the walls. Absurdity is what prevails.
@Calgary,
That opt-in scenario would not help the expats who left USA as adults, and made lives elsewhere whilst having no clue about USA’s unique to the world citizenship based taxation laws.
Should they sign some papers also, on their way out that explains the US tax implication CLEARLY to them? Would they even understand what this REALLY means even if they did (for example, think Canadian mutual funds)? It has taken most of us who had our OMG moments, months to grasp the whole impact of our US taxpayer status on our financial lives.
And why should anyone be forced to renounce US citizenship simply because one chooses to live in another country?
Taxation and citizenship DO NOT MESH, unless one redefines the meaning of the word ‘citizen’ to equate to ‘resident’. Then one does not have to opt-in or opt-out, claim anything or sign anything, one simply has to LEAVE the USA.
@Calgary, Yes, some are more entrapped than others – your son being a prime example.
Another example, are those born dual, who left as young children; they are more entrapped than those who were born American only but expatriated as adults later to become citizens of their adopted countries. The later can claim relinquishment – an easier way out, yet paradoxically, they are MORE AMERICAN than the person born dual who left USA as a child and has no choice but to renounce.
@Calgary, Your son gets hit twice – once for being born dual (cannot relinquish), and second for not being able to renounce.
It would be great if all we had to do is leave the USA. I did. I was WARNED by the US Consulate when I became a Canadian citizen that I would be losing my US citizenship — eons ago in 1975. End of story for me, along with confirmation from accountants that did my Canadian tax returns that I did not have to file US tax returns, all in hindsight erroneous. In 2012 I chose again which country I give my allegiance to and have parted with quite a chunk of my retirement savings to be able get a Certificate of Loss of US Nationality. That should not have been necessary. And, it should not be that you or my son (or all others in the same situations) should be entrapped into this immoral maze.
That is the importance of discussion, of resources here at Brock — so each of us can make our own best decisions in this climate of absurdity in which we find ourselves. Perhaps something so important as this — the tax laws we have to follow to pay the taxes we will owe for the rest of our lives should be in the high school curriculum as a requirement for graduation. Nothing in my US education, limited as it was, gave me that knowledge on which to base my life decisions that have anything to do with taxes. I can’t speak for Canadian education, but I don’t think my daughter learned an more from this side of the border than I did in the US. And, my son sure didn’t!!!!
I don’t have any answers. Only what makes sense in my mind.
@Bubblebustin
On first read, it looks like 1031 would not be available for personal sales/swaps. Maybe ways to play around with turning into a rental or an asset for producing business income? In Canada there are tax consequences for change of use but don’t know about US.
At any rate the timing issues look quite challenging.
@Mark Pack,
I have heard worse & been called worse… How about living your whole life as a person who thought they followed the rules then get slammed with *tax evader*…. Then have our own home gov’t toss us under the bus & call us US persons who happen to live there… even if we are born there… From reading your article… u seem to take glee in the fact that the poor man… no matter his politics.. is in the situation we all are in… He is in a position to clear the problem if he choose to but he is standing on principal… he doe not live in the US why should he pay taxes there… why don’t u have the UK enforce the laws of other countries that state women can not drive… one child per family… Be aware of the fact that even a green card immigrants are trapped in this situation who hold no US citizenship…. so instead of skimming titles for buzz words… actually spend the time to understand the situation before u make light of it… US persons under the definition of the US are mad… pissed.. are being hunted down worldwide… people use to be proud to say they had some sort of US connection…. now its a secret we tell no one… does that sound familar to u…. think of Germany…. does that help….
@WhiteKat
Speaking only for myself here, I would have to agree with Calgary411, and say that the citizenship that was “gifted” to me IS the main problem. FATCA, FBAR, and whatever they come up with next, are just symptoms of the disease. I took an oath to a new country which I dearly love, and have lived quite happily with my new status. Years later I walked into a trap, just like Boris, and had citizenship gifted on me. In the true spirit of giving they even made it retroactive as if my last twenty years of living happily ever after never happened. I agree that if the IRS had been clear about anything, then many people would not be stuck in the middle of a bad situation. But I personally have no desire to belong to a club that would treat it’s members in such a way.
This man owes nothing to the USA. Clearly, there was an err on the part of the IRS to locate all expats and educate them on USA laws after they leave the USA. I mean, how preposterous is it to tell a 5 year old to cough up their life’s savings at 50 years old when they were never informed of a USA law as they left the USA to live where they were free to live. All the power to Boris Johnston as he has made hi case of a human rights violation from the USA quite clear!
@ProudAussie, You are speaking only for yourself, or at least for a subset of people in situations similar to yourself. There are people, some of them may even be part of the ADCS-ADSC organization who CHOOSE to be American WITHOUT the taxation. In other words, CBT is THEIR problem. We ALL WIN, if CBT goes away, not just those with unwanted citizenship.
Having said what I just said, and insisting that CBT is the root of the evil here, I still agree with AnnFrank’s proposal which if successful would free 90% of us afflicted with CBT now ( with the remaining 10% freed over 10 years).
@BethThomas Wow, you took the time to send three whole insults my way. Most kind of you and a great way to make your case.
@ WhiteKat
You’re totally correct, thank you. We would all gain, and I was speaking for myself. CBT is the elephant in the room, and people should be free to follow their heart when it comes to citizenship.
@Mark, I see you’ve met our hospitality co-ordinator BethThomas.
BT…please, get back in your cage! You are scaring potential future ANTI-FATCA/ANTI-CBT article writers away!
…and another commenter using many different addresses which we’re trying to crack down on.
In the end it is the CBT that provides the incentive for the US to hold people against their will. I think I’ll write to my congressman about that….Wait a minute..I forgot….I don’t have one.
@Mark
We do not have to “make our case”, the case makes itself. I would be most interested in a rational argument that could in any way support the validity and morality of citizenship based taxation. It is on the US’s shoulders to make their case. Because “It is the law”, is NOT a valid argument. Having a huge economy and even larger bombs are just enforcement tools for extorting nations and robbing many of their citizens. All of those supporting this endeavour should think it through, the ground swell of blow-back is starting to form, it could very well be ugly for the US. The only reason I even care is this will also hurt Canada.
@Mark, as I believe I alluded to in a previous comment, ‘US persons’ are not representative of any one ‘type’. We are different in a myriad of ways, too many to list. Few of us can relate to Boris. Some of us CAN relate to BethThomas at least on some days. 🙂
My point is, ignore the pomp and pageantry, and forget about the uncalled for comments made from people who cannot control their anger at being victimized, and you will find the TRUE story.
@Mark Pack
Thanks for commenting. Sorry for any ad hominem (or as my kid says “ad Enimem) comments sent yr way from this site.
I actually volunteered for George McGovern the last time I lived in the US – it was a long time ago and now I really don’t recognize the US I spent my early years in. Fortunately I moved to Canada and became a Canadian citizen – best move of my life – I feel like I’d bought Tim Horton’s stock before Burger King’s reverse takeover drove Tim’s shares thru the roof!
Now I am solely Canadian. I don’t have a dog in this race anymore.
However, I would like to try and explain in civil terms why there is a certain anger here.
Ironically many Canadians of US origin started out supporting Obama’s Democrats.
However I am now more inclined to agree with Chris Hedges, who wrote: “The Obama brand is designed to make us feel good about our government while corporate overlords loot the Treasury, our elected officials continue to have their palms greased by armies of corporate lobbyists, our corporate media diverts us with gossip and trivia and our imperial wars expand in the Middle East.”
Anyway, here is why so many so-called “US-person” Canadians are upset with the Obama brand, and the US in general.
Under Obama’s administration, record numbers of Americans living abroad have shed US citizenship. The demand for renunciation of US citizenship is so great that wait times for this service at US Consulates are almost one year. This is despite the Dept of Stte recently raising its fee for renouncing US citizenship 500% to $2,350 USD.
Much of this is a result of the arrogant and dysfunctional US law FATCA (Foreign Account Tax Compliant Act). This criminalizes the legitimate Canadian local bank accounts of any Canadian that the US considers a so-called “US-person.” This law is a creature of the Obama’s Democratic regime.
In Canada, it affects 1 million Canadians, many of who’s only US tie is birthplace. My special outrage is that this includes ‘border babies’ – Canadians born in the US due to medical necessity. Harper’s Conservatives (who BTW generally loath the Obama brand) caved to US pressure and embedded this US legislation in an Omnibus Budget. Canada’s banks must now ask their customers if they are so-called “US-persons”, and if so send all details of their personal financial accounts to the US IRS, via obedient poodles at Canada’s CRA.
How does this tie into the recent Republican sweep? Why do Canadians even care?
The Republicans oppose FATCA. Republicans Abroad organized a constitutional challenge to FATCA on behalf of their constituents and hired America’s top constitutional lawyer James Bopp to move it forward. Other US citizens abroad who might have voted Democratic have shed their US citizenship.
Bottom line: under Obama, the US mounted a tax jihad against anyone living abroad with a remote tie to US person-hood. The chickens are now coming home to roost. Hopefully, the Republican majority in Congress will keep their word and end FATCA.
In Canada, the Alliance for Defence of Canadian Sovereignty launched a Charter-based lawsuit against the FATCA Intergovernmental Agreement and engaged leading Constitutional lawyer Joe Arvay to champion the rights of hundreds of thousands of Canadians who are now 2nd class Canadians due to a US place of birth.
The angst, fear and ill will stirred up by this situation are pathetic – and very bad for business as well. Ironically, the main beneficiaries of FATCA are America’s competitors in the global economy – it’s becoming impossible for US citizens to live and work abroad.
@Calgary,
Its interesting how these types, with new Alias’s just show up, when they do, and then someone like Mark, visiting here for the first time, would naturally just assume they were one of ‘us’.
BT is different. I think she really IS one of us.
@ Mark Pack
Thank you for commenting here. We truly understand your sensitivity to insults. Lard knows, there have been many here who have endured the slings and arrows of those who simply cannot summon up enough empathy to even begin to understand the adverse effects of US citizenship-based taxation and the recent enforcer of that insane system (FATCA). Please keep an open mind and dig beneath the surface story of the Boris Johnson story. (I sense that the Mayor evokes a wide spectrum of opinions, most of which have nothing to do with his current tax/citizenship dilemma.)
@Tricia
Why would the property have to be treated like a principal residence for US tax purposes? Surely not because you treated it as a principal residence in Canada or the UK. Apparently you can use a 1031 swap on vacation homes. As Robert wrote:
“True, and now that I think about it, it is fairly common for tax planners to try to have a particular item treated as one thing under one country’s tax system and as something quite different under another’s.”
There are some caveats, but taking this alternate route could be a better option than claiming it as a principal residence throughout the home’s ownership and when it comes time to sell.
@ Mark Pack
Mark, Further to the on-going Boris Johnson controversy, I inadvertently co-mingled your comments from a UK Liberal Democrats’ POV with the Democratic Party in the US!
I hope you and the Liberal Democrats in general are not too insulted by that – it was an error!
The US Democrats get a lot more ink in Canada than the Liberal Democrats do.
But it is important to realize that there are untold thousands of long-term British citizens in the same same situation as Boris Johnson due to an accident of US birthplace. The British government – first out of the gate to roll over on a FATCA IGA – has thrown its own British citizens and loyal subjects to the dogs. Shameful… and vastly under-reported. BTW any reciprocity regarding information exchange is illusory – the US state of Delaware is one of is the world’s largest tax havens, and that ain’t changing anytime soon.
Canada is the battlefield state for the challenge to FATCA IGAs because we have possibly a million Canadians who are now 2nd class citizens in their own country due to our government’s cowardly capitulation to the bad laws of a foreign state. We also have a strong Charter… and a great lawyer.
@Wondring, re: “Now I am solely Canadian. I don’t have a dog in this race anymore ”
That is NOT true. You and every other Canadian, and every other citizen of every other country of the world, most definitely have a DOG IN THE RACE. When ONE single country, is allowed to override the laws of every other country in the world, we ALL HAVE DOGS IN THE RACE!