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.
I think I owe Brockers an apology. I’ve defended this guy Boris Johnson on occasion thinking he was a strong potential ally having faced similar situations to many Brockers.
Clearly I was very wrong. This Boris Johnson is not our friend.
He probably made so much money selling his book in America that he feels re-compensated….
Political animal. Does and says what might serve his career down the track.
Dash, I had hopes too. I identified with a couple of aspects of his story . . . though not his wealth!
It’s pretty obvious that Boris got a deal from the IRS: they wouldn’t require him to pay anything so long as he didn’t talk about it. So he probably now harbors no hard feelings against the US, because in the end the system worked for him.
The odd thing about Johnson’s case is that all we hear about is the IRS demanding capital gains tax on his house sale. What about non-filing of US tax returns since he left the USA at age 5? What about his FBARs? Or did he, very incredibly, remain US tax compliant all that time, with the sole exception of his house sale?
As a former resident of London, I used to like him too, for a number of reasons, until this current betrayal.
The Boris Johnson case is sui generis. The USG might have (and still might, if he (MP that he now is) becomes a minister of state or even Prime Minister) made exception for him (in terms of the US passport requirement if he travels on official business — although it is Department of State policy never to grant diplomatic immunity to its own nationals his official acts would probably attract sovereign immunity). However Johnson enjoys a stream of royalties from his books published and distributed in the USA. Those royalties would be held hostage to Johnson’s sorting out his tax obligations.
My guess is that his Wall Street lawyers and his Big Four accountants, intimidating as they are (and always being able to dangle the possibility of future employment to senior IRS staff) will get a generous deal as regards late-payment penalties. How renunciation and its tax consequences can work out in his case if he is a “covered expatriate” I leave to others.
US “interests of state” always (sort of like “the best interests of the child” in deciding rights and obligations even when they are ludicrously unjust: as in forcing a “father” to continue to make child support payments even after it is proved by DNA that the mother lied about paternity) predominate. In the Kawakita case (Japanese-American traitor, very famous SCOTUS case and Eisenhower commutation of death penalty) as in the Yaser Esam Hamdi case (deported Saudi-American terrorist), US citizenship can “disappear” when it suits the USG.
What a weasly little sycophant!
In the EU there’s two choices either comply or set up IBS Europe and start reaching out to anyone earmarked a ‘US person’ or anyone affected by their relationship with a ‘US person.’
The good news is the BRICs aren’t sitting still. An alternative to the SWIFT payment system looks like it will be operational by the end of 2015. Little by little the post WWII dollar world is being dismantled.
America may remain the preeminent military power for the decades to come, but as retaining sole reserve currency status those days are rather more limited. If America does have financial war to wage, it will have to risk physical war to implement its policies. Obviously much more risky and costly rather than using mouse clicks to punish people for using the US dollar.
UK government is trying to force people into private pensions and still let’s FFI grass on ‘US persons.’ Yes the person apparently can opt out, but can the FFI opt out dealing with a ‘US person,’ who is also an EU citizen?
http://www.independent.co.uk/news/business/news/pension-rule-changes-mean-employers-of-carers-and-nannies-must-pay-10289437.html
@andy05
I doubt that Boris’s concerns extend much beyond Boris, even if he didn’t get a sweetheart deal. Going after FIFA is generally very popular in Britain.
@Barbara
Let’s not give them any ideas! Boris is of an age where he would have had to decide between U.S. or British citizenship when he turned 18. He obviously chose British and only resumed U.S. citizenship after being told incorrectly that he could not continue without getting a U.S. passport during a stopover in the U.S. I’m no Boris fan, but that smacks of coercion.
@Don
Pensions suppliers might go along if these accounts are non-reportable under the IGA.
@Publius wrote “…Let’s not give them any ideas! Boris is of an age where he would have had to decide between U.S. or British citizenship when he turned 18….”
As I recall the matter, Boris had no reason to consider that he “owed allegiance” to the USA. He apparently was brought to the UK by his parents on a British passport. It was only when he booked a holiday to the Caribbean with a change of planes in the USA that the carrier refused to board him. His family traveled ahead and he had to re-book at his own expense via Madrid. The account has been deleted from boris-johnson.com but you can find it copied here: http://righteousinvestor.com/tag/boris-johnson/
Some years ago I got to know a colleague at a British embassy who was born in the USA under circumstances similar to Boris’s. He, however, became a UK military officer and renounced his US nationality at that time. (Both the US and the UK military look askance at dual nationality, but the UK is stricter. https://duckduckgo.com/?q=dual%20nationality%20site%3Amil The US military in terms of security clearance is said to take a harder line than the State Department, but for both there is recognition of a potential for compromise when there is nationality or family in relation to a potentially hostile state.
On the other hand, in view of the Ireland Act 1949 there are virtually no restrictions on UK government employment of Irish citizens. I was told that a military officer would be required to take up British citizenship but the UK Government official I spoke to (in the early 1980s) couldn’t think of any other post where that was an issue.
So: Boris would not *have* to renounce anything at age 18 or any other age, although I think it would compromise a ministerial post if he did not. Under current law, renouncing at age 18 would mean he would have escaped any consequences, tax or otherwise, under US law. It could prove costly to him now.
What @dax wrote (“It’s pretty obvious that Boris got a deal from the IRS: they wouldn’t require him to pay anything so long as he didn’t talk about it.”) is wildly improbable. An ordinary person who, like Boris before he obtained his first US passport, has never shown up on any USG database nor been highlighted in the news might muddle through without assets, income, travel or heirs in or to the USA. But not Boris.
@GwEvil
“Sycophant” – is that a special breed of super-poodle? 😉
I haven’t read anywhere that Boris has actually followed through with his renunciation. I think we can count on him doing what’s most politically advantageous for him – including the possibility of retaining US citizenship. After all he said it’s “hard to give up”.
@Bubbles – it’s more like a stammering yappy little lapdog who’s bark is worse than it’s bite.
Disgusting little man. I had hopes for Boris Johnson but he has turned out to be no more than a disgusting little man.
Correction … no I was not pimping hoes to Johnson …. I mistyped the word “hopes”. Gosh what a slip of the finger …. ooops ….. middle one in the right hand I guess.
So much necessary typing with our middle fingers.
It appears Boris is just another kleptocrat politician who says whatever is du jour and in vogue. Another selfish numbnut who pussied out when his balls were in a sling due to his property tax. He could have done the right thing and stood up for himself and all peoples affected by the tragedy of FATCA but no, his political Brit beancounters said “Oh no Boris,
It will better for your own political aspirations if you bend over and take it between the buns instead”. Hence ol’ Boris dropping his drawers for the U.S. treasury and the IRS.
Now we have him doing the political two-step side speak that despicables like himself and Cameron are so famous for.
These bsterds are just more if the same politician slimy two-faced backstabbing parasitic amoebic plastic talking puppets so easily manipulated by the polls and public opinion. Sickening we have to endure these fakes.
Don mentioned a substitute to the current SWIFT system? Would Don be so kind to share all he knows about that with us?
@Brick re: “These bsterds are just more if the same politician slimy two-faced backstabbing parasitic amoebic plastic talking puppets so easily manipulated by the polls and public opinion. Sickening we have to endure these fakes ”
Well, in Canada, the taxpayers are SMART – we don’t pay high taxes for nothing! We get rid of our “slimy two-faced backstabbing parasitic amoebic plastic talking puppets” by paying them 6 figure pensions at age 55, if they step-down in their 40’s. No wonder the CONS all do what Harper tells them to do.
http://www.cbc.ca/news/canada/nova-scotia/peter-mackay-exit-allows-him-to-collect-full-pension-at-55-1.3095572
I should like to see the details of Boris’ arrangement with the IRS. Did he actually pay the entirety of the exchange-rate-skewed phantom gains? Or did he negotiate? We want answers.
@JDT re: “we want answers”. Good luck with that.
I too would like to know the terms of his deal with the IRS, as I also paid US tax on the sale of my principal residence in Canada. I did have the failure to file penalty refunded though by opting from OVDI to Streamlined. No FBAR penalty either.
@andy05. Why is it wildly improbable Boris got a good deal? Except for your say-so that is.
@dax:
If you’re going to be sarcastic and a troll you aren’t going to get opinions that don’t agree with you. Maybe that’s what you want.
But to answer you politely, it depends what one means by “a good deal”. In my dealings in IRS audits one point keeps coming up: matters that have been “brought to their attention”. Most IRS auditors and lawyers are not stupid and not nasty. They understand that there are situations where tax exceeds 100% of marginal income. Few auditors look for such cases.
Boris has been written about. There are people — perhaps including some on this forum — who would complain if Boris were known to get “a good deal”. As I wrote earlier, he doubtless has Wall Street lawyers and Big Four accountants working for him, and they can intimidate. But they could do the same for you, or anybody. It makes a difference when you have an ordinary Enrolled Agent or negotiate pro se compared to when some big firm is (expensively) on your side.
In general I think that only goes to the point of “wilfulness”. The only ones who can actually bargain and pay less than “list price” on taxes and interest and maybe pay no penalties are those without assets, income or heirs in the USA. The IRS is a collection agency: they bargain all the time when the alternative is getting diddly squat.
But as I said, your definition of “a good deal” probably differs from mine although I have been in cases where it’s happened. Specifically a tax hater who moved to Europe with all his assets and died there: but his heirs were Americans living in America so somebody had to negotiate with the IRS before accepting the inheritance. Or disclaim it, in which case the IRS would have gotten nothing.
Taxpayer records are secret, as you know. Even if a Revenue Ruling were relevant it would be redacted to hide taxpayer identity.
Be polite. I am not a regular here, I look in once every few months. And I never come back to a forum that doesn’t want to hear what I have to say.