Other British commentators may not be so happy, but Boris Johnson heartily endorses Washington’s “extraordinary doctrine” (his words) of jurisdiction over actions undertaken in other countries which use the U.S. financial system:
While other countries turned a blind eye, the Americans have stepped in. The US has an extraordinary doctrine – that if you commit a crime by using an American banking network then you have committed a crime under American law and must answer to America; and if it brings the kleptocrats of Fifa to justice, then I am all for it.
Johnson also warns of evil anti-British and anti-American forces who aren’t so happy at the U.S.’ imperial triumphs with FIFA and FATCA:
And then there is a further geopolitical problem. You and I may rejoice at the notion of Britain and America triumphing in the final reel of the movie – James Bond and Felix Leiter coming together to winkle Blofeld from his lair. Not everyone sees it that way; not everyone likes the idea of an Anglo-American imperium.
This is a remarkable change of heart from seven months ago, when he was much angrier about U.S. extraterritoriality:
No is the answer. I think it’s absolutely outrageous. Why should I? I haven’t lived in the United States since I was five-years-old. I pay my taxes in full in the United Kingdom, where I live and work.
As you may remember, Johnson paid higher UK taxes during his entire period of homeownership in that country because of the UK’s lack of a mortgage interest deduction, and then — despite his early cries of resistance — gave in and paid US capital gains taxes on the sale of that same property because it went “untaxed” by the UK. This is just one example of how different countries’ incompatible tax breaks on housing result in double taxation for American emigrants and citizens of other countries who are deemed to be Americans. (And that’s not even getting into the issues with “foreign”-currency mortgages.)
Both Johnson’s Facebook post and the version at The Telegraph are open for comments (the latter using Disqus). There’s also a Reddit thread at /r/soccer.
Let me add a couple of points. As I understand it, in most cases of concompliant, non-wilful irregularities the IRS goes back only six years even though there is no statute of limitations in failure-to-file cases. That has been my experience with non-filers.
Also UK government employees who are UK citizens (and perhaps Irish citizens treated as UK under the Ireland Act 1949, I haven’t checked) pay only UK tax on their UK government salary and government service pensions.
Finally, the IRS — in cases where there is real doubt about US citizenship or where US citizenship was lost and later reclaimed — does not impose tax for those years when a (non-)taxpayer did not “avail himself of an attribute of US citizenship”.
Boris handled his case all wrong: when excluded from that flight he ought to have argued that he had relinquished/lost his US nationality long before. Like some people on this forum he was bamboozled into getting a US passport: “availing himself of an attribute…”
Like John Richardson I tell people to see an immigration and nationality lawyer before taking any action with a tax layer. Like a doctor, a specialist lawyer will always find something wrong with you in his or her field, and maybe ignore everything else.
@andy05
It never ceases to amaze me how Boris was left so flat-footed throughout his whole ordeal. You’d think someone would have tried to tip him off along the way. Do you suppose that others may have tried and he brushed them off in disbelief? He did refer to the US taxation of non-residents as extraordinary. I can also see how he’d quickly move on if he doesn’t want others to dwell on how he was caught unaware. Being ambushed like he had wouldn’t bode well for someone who wants to lead a country, would it?
@andy05 re: “Be polite…. I never come back to a forum that doesn’t want to hear what I have to say.”
That’s never stopped me. 🙂
Politeness is the practical application of good manners or etiquette. It is a culturally defined phenomenon, and therefore what is considered polite in one culture can sometimes be quite rude or simply eccentric in another cultural context.
For some of us, this battle and stress has gone beyond the realm of “good manners or etiquette”. Some of us have gotten down into the trenches and seen the bullshit coming from the United States for what it is. When it comes down to it, THIS is a war. andy05. A financial war where there will be losses; financial losses and impacts to families. If you are unaware of that, then by all means continue with the schoolyard “I’m going to take my ball and go home”. But do not patronize us with platitudes of “good manners and etiquette”. I’ll take my bayonet and rifle and dig through the muck, the shit and the excrement and focus my anger and bitterness on those who deserve my total and utter enmity: namely those in the government of the United States, The IRS and the dumb fucking homelander assholes who persist in supporting the notion that expats should support those at home. If that rips your tender little spine to pieces and makes you wanna take your ball and go home…well BE MY GUEST.
@andy05, politics, connections and clout play a role in the way that people are treated by the IRS/US Treasury. Look at past Treasury Secretary Timmy the tax cheat Geithner.
@badger
I suspect Geithner’s ability to escape relatively unscathed from his dealings with the IRS had more to do with the fact that he had the money to pay up quickly when the IRS came calling–not so much his connections. The IRS can and will play hardball when dealing with a famous person who is down on their luck–people like Lindsay Lohan and Pete Rose come to mind. In fact they have a high incentive (from their perspective) to do so as it helps scare the average person into compliance. An ordinary person who was broke would also have a tough time.
Criminal tax evasion charges against Geithner would have been unlikely because he disclosed his income but just didn’t pay the full tax. Again–this is partly simply because he is well enough off to afford a good lawyer so not an easy target for the IRS.
Of course a completely separate issue arises regarding whether–given that he admitted not complying until he was audited–he should have been confirmed as Treasury Secretary.
Like others in this thread I’d like to know more about Boris Johnson’s situation–whether there was any kind of an agreement and if so what he ended up paying–also whether he actually did, in the end, renounce US citizenship.
But @Dash, why did Geithner not have to pay any penalties? Unlike those abroad who were told that the only way to become compliant was to enter the OVDI/P programs – but with built in penalties.
“………When ordinary American taxpayers don’t pay their taxes on time, they face penalties owing to the IRS. Three prominent Democrats, Charles Rangel, Timothy Geithner, and now Tom Daschle have all been shown to have seriously underpaid their taxes until they were caught. All three of them did pay up when it was clear their political futures might be in jeopardy, but none of them was charged the penalties that the rest of us would have to pay. In each case, the politicians said the mistakes were “honest” or “careless” or they indicated they did not know the money and benefits received were taxable.
Not only did all three get free passes on the penalties, but Rangel gets to keep his job as chief tax writer for the United States, Geithner has been elevated to head the Treasury and the IRS, and Daschle, who has since withdrawn his nomination, was nominated to head Health and Human Services. …”..
http://www.accountingweb.com/topic/tax/rangel-rule-would-give-taxpayers-free-pass-penalties
@badger
Because he had the leverage to negotiate a deal where he paid back taxes and interest but not penalties:
First unlike most Brockers he is not an expat.
Second he had the cash to offer the IRS a deal: he’d pay the tax and interest in exchange for waiving the penalties or he’d fight the penalties for years on the grounds it wasn’t willful. The IRS took the first choice.
The IRS may be the devil but ordinary people make deals with the devil every day.
I have myself taken the IRS to Tax Court over a similar matter. About a month before the hearing the IRS threw in the towel and gave me everything I asked for. I believe I was right but it wasn’t really about who was right or wrong. It was more that the amount in dispute wasn’t worth the time of the IRS lawyer to continue to fight. And of course living in the US I had access to the US court system.
I was lucky and didn’t have to go to court but I assume Gwen and Ginny will have to go to court.
@badger
And he may well have been lying when he claimed it wasn’t willful. But like I said sadly it’s usually not about the truth but rather it’s about who has more leverage to negotiate.
@andy05. “but to answer you politely”
First you didn’t. You called me a troll when I’m obviously not.
Secondly, you didn’t begin politely. You called something I said “wildly improbable” without providing any evidence.
Thirdly, you *still* haven’t explained why it’s wildly improbable. Boris could well have used the argument that, after all, he was forced into using an American passport, etc. etc.
@andy05
My point about Boris and the US passport was based on comments that he made in the Spectator in 2006 about having had a passport with Dean Rusk’s signature in it (Rusk was Secretary of State in the 1960s). He had had a U.S. passport when he was quite young and that was one of the things that caused problems when he tried to transit through the U.S.. In that article, he also says that he knew he qualified for U.S. citizenship when he was young. I am about Boris’s age and know for certain that the U.S. expected eighteen year olds at the time Boris was eighteen to decide which citizenship they were going to stick with.
I take your point about the IRS being strategic about the cases it pursues, but not everyone is going to have the money or the know how to hire a topnotch lawyer. Someone who is merely affluent rather than rich would seem to be a good target. A lot of damage is done without the IRS lifting a finger. What about ordinary, financially unsophisticated people who have never heard of FATCA until Fidelity UK notices their birthplace and threatens to both close their ISAs and shop them to the IRS?
@Dax
It will be impossible to ever know what went on with Boris and the IRS. If you compare what he said in 2006 with what he has said more recently, it doesn’t match up. His 2006 makes him seem very defiant and assertive, when he seems to just have gone along with U.S. government demands.
@Bubblebustin
Yes, he was totally caught off guard and went way beyond answering the question the caller asked, digging a nice big hole for himself. Not prime minister material.
@Dash1729, “Clearly I was very wrong. This Boris Johnson is not our friend.”
Thats why I stated many moons ago that Boris should not be allowed to take his seat in Parliament unless he has relinquished his USC.
The United States requires and actually states they REQUIRE the allegiance of a so called dual national.
You can NOT serve HM Government and the US Government at the same time.
@George
Yes I remember the discussion.
I’m still very reluctant to make relinquishment an absolute requirement for taking up a foreign government position because it could have exactly the opposite effect to the effect you intend: the US could control who gets to take their seats in Parliament, etc, simply by declaring a particular candidate to be a ‘US person’ for tax purposes. If a given foreign parliamentarian expressed views contrary to US interests, all the US would have to do would be to declare them a ‘US person’ based on past minimal contact with the US and they would have to give up their seat in Parliament. Is that really your intent?
I believe you intend with your suggestion to decrease the influence of the US government on British or other non-US legislators but I believe your proposal would have the exact opposite effect: it would increase US influence, not decrease it.
As I think I mentioned earlier, I think Australia’s approach is best here: one is expected to make a reasonable effort to relinquish any non-Australian citizenship before taking one’s seat in Australia’s parliament. But it isn’t set in stone if the non-Australian government behaves unreasonably in blocking the attempt to relinquish. I don’t know if there is any precedent in Australia regarding what happens if a prospective Australian member of parliament is having trouble relinquishing US citizenship due to FATCA issues, delays at the US consulate, etc. But I think in principle Australia’s approach is the correct one–members of Parliament should ideally be Australian-only but not if the non-Australian country abuses this to block an Australian citizen from taking their seat in Parliament.
As for Boris Johnson, he is not our friend but he is not our friend because of his views–which he has now revealed to be quite offensive–not because the US might consider him a “US person”. For all I know he might be now have followed through on his promise to relinquish US citizenship–so in fact have no formal loyalty to the US from the US perspective–but his views remain highly problematic. However it is unfortunate that I defended this guy in particular in the past given what his views have turned out to be.
@George
To give a concrete example of why I’m concerned with your approach: let’s consider Elizabeth May, who is the leader of Canada’s Green Party, was born in the US, and has (unlike Boris Johnson) been very supportive of our side. I think May even posted on Brock once. Suppose the US suddenly declared May to be a “US person” based on a US place of birth and wouldn’t accept as valid whatever past efforts May has made to relinquish US citizenship. Suppose the US also said that May would have to wait a year for an appointment at a US consulate to give up US citizenship and even then it is unclear it would be granted.
Would you support requiring May to give up her seat in Parliament for a year until she was able to relinquish US citizenship?
The problem with making general rules such as you propose based on specific incidents (like Boris Johnson) is that it would potentially hurt not just those who aren’t our friends (eg Johnson) but also those who appear to be our friends (eg May).
Boris Johnson is now the UK’s Foreign Secretary.
http://www.telegraph.co.uk/news/2016/07/13/prime-minister-theresa-may-makes-new-cabinet-appointments—as-b/
It would be great if he would take on FATCA in his new role. I predict he will remain silent.
I wonder if Boris will be permitted to enter the US as Britain’s Foreign Secretary on his British passport or if the Americans will demand a US one.
Is becoming Foreign Secretary an expatriating act?
It is clearly expropriating. For a non policy position, the presumption is no intent . For a policy level job, intent has to be determined. The foreign secretary cannot have loyalty to the U.S.A. Therefore he has relinquished whether he agrees or not. Boris cannot have it both ways.
It’s a policy level position. As long as he intends………should be a no brainer………
Duke and Tricia – thanks – that’s what I thought.
It will be interesting to see whether the mainstream press asks Boris about his status. If I were a UK citizen, I would want to see PROOF that he no longer has any ties to the US. I wonder if the DoS will expedite his CLN?
@Moderators, could someone do a post on Boris the new UK Foreign Secretary?
We need to bring this out in the open as I think the publicity will help our cause.
As UK Foreign Secretary he is in charge of the counterpart to the US State Department that issues CLNs.
Boris being Boris is likely not yet renounced and has not shown up on the patriot list.
The first inside page of my passport states “Her Britanic Majestys Secretary of State requests and requires in the name of Her Majesty……….” Well that SoS happens to now be Boris…..
Will the USA let him enter the USA on a UK Passport? If he has renounced will he need to show a CLN or pending a CLN a “receipt” that he paid the fee? Will Boris need to be interviewed of intention?
To be blunt, this is delicious for our cause…maybe @Eric can do some of his brilliant writing.
The U.S. can’t very well refuse entry to the UK Foreign Affairs Secretary unless it chooses to break off diplomatic relations with the UK.
This familiar article from July 1st has been updated with Boris’s recent appointment:
EXCLUSIVE: New UK Foreign Secretary Boris Johnson Is An American Citizen
http://heatst.com/politics/boris-johnson-remains-an-american-citizen/?mod=sm_tw_post
Now he has three passports: UK, US, and diplomatic.
Not quite on topic (aside from revealing the true pecking order of the “Anglo-American imperium” in which Johnson delights) but I laughed at the photo:
http://www.thenational.scot/news/15213840.The_humiliation_of_Boris__Johnson_gives_in_to_US_demands_not_to_meet_Russian_counterpart/
Much more likely that the US told May to tell Johnson he wouldn’t be going.