London Mayor Boris Johnson Hates the IRS, Too

[webfact]

London Mayor Boris Johnson Hates the IRS, Too
The dual citizen says he's renouncing his birthright after getting a fat tax bill from Uncle Sam.
DAVID A. GRAHAM

What's more American than Boris Johnson? Brash, self-confident, charismatic, profane, ambitious and upwardly mobile but skeptical of authority, the mayor of London (who was born in New York City) seems like he'd fit right in on this side of the Atlantic.

But Johnson is forsaking the land of his birth—and in particularly spiteful fashion—announcing he intends to renounce his American citizenship after wrapping a tour of the United States, during which he boosted the Boston Olympic bid, met with leaders in Washington, and was reportedly mistaken for Donald Trump in New York.

Johnson's British parents were living in New York City when he was born, making him an American citizen. That has cost him. In November, Johnson was blustering (as he is wont to do) about the U.S. government trying to hit him with a massive tax bill. Johnson sold a house in London for a cool £730,000 profit, and as U.S. citizens are required to pay capital-gains tax on overseas transactions, Uncle Sam sent Mayor Boris a bill.

The amount is unknown—aides insisted a £100,000 estimate was overly high (the IRS cannot legally comment on individual cases), but Johnson said he wouldn't pay: “No, is the answer. I think, it's absolutely outrageous. Why should I? I think, you know, I'm not a—I, you know, I haven't lived in the United States for, you know, well, since I was five years old." Fittingly, the reason for Johnson's move is also quintessentially American: He hates the IRS. [read more...]

Full story: http://www.theatlantic.com/international/archive/2015/02/boris-Johnson-renounces-us-citizenship-tax-bill-mayor-london/385554/

-- The Atlantic 2015-02-18

[Kerryd]

Curious too because all of the Americans I've worked with in Afghanistan didn't have to pay any tax on their income as long as they were out of the states for at least 330 days every year. If the IRS is taxing him on the sale of this property, why haven't they been taxing (or trying to tax) him for all of his earnings since (whenever) ?

[khwaibah]

Curious too because all of the Americans I've worked with in Afghanistan didn't have to pay any tax on their income as long as they were out of the states for at least 330 days every year. If the IRS is taxing him on the sale of this property, why haven't they been taxing (or trying to tax) him for all of his earnings since (whenever) ?

Only on the first 99,200 USD after that your busted. He makes more than that and if he wants a US Passport he has to pay.

When Afagan started it was the first 80k was tax exempt.

Edited February 18, 2015 by khwaibah

[wabothai]

And so do I !!!!!!!

I pay 30 % alien taxes on a social security payment of $ 200.00 a month.

[Scott]

Even if he renounces his citizenship, he still owes the taxes.

[zydeco]

Even if he renounces his citizenship, he still owes the taxes.

Once the IRS has you, they don't let go.

[realenglish1]

This is a violation of the Constitution. The fathers of the USA fought England because of taxation without representation. The king wanted them to pay tax even though they did not live in England. This is no different

This is why they fought the revolutionary war. This is truly taxation without representation So far no one has fought this in the courts but they will in time.

[wwest5829]

Even if he renounces his citizenship, he still owes the taxes.

It can get sticky, renounce citizenship and there are tax penalties. This was designed to catch up on those

Wealthy individuals that were making their wealth in the U.S., then deciding to renounce to save paying taxes on that wealth. Unfortunately, we have had folks trying to hid their wealth from taxation dodges. Who would have thought?!

[wwest5829]

This is a violation of the Constitution. The fathers of the USA fought England because of taxation without representation. The king wanted them to pay tax even though they did not live in England. This is no different

This is why they fought the revolutionary war. This is truly taxation without representation So far no one has fought this in the courts but they will in time.

r

Interesting take on U.S. History....but quite wrong.

[Muhendis]

Glad I'm not American. As a UK citizen I am liable for tax on any income earned in that country and only in that country. Wherever I live in the world that rule applies. It could be that Americans have a human rights issue with this....

[AJBangkok]

It's funny that Americans prattle on about freedom and liberty but the actual reality is that they are all born into servitude. No matter where they go or what they do they have to pay the American government 32% odd of what they earn for their entire life. If they don't pay they go to jail and when they get out they still owe the money. The only way they can break the bonds of this modern day slavery is to essentialy buy their way out. They have to first acquire another passport then they must renounce their citizenship and pay their exit taxes. The cost of a new citizenship from say Nevis and St. kitts is roughly 300k and on top of that is your exit taxes. It's not cheap to buy yourself out of slavery..

Oh and by the way you cannot use ' not wanting to pay taxes" as a reason to renounce your citizenship. It is not allowed. You can't use something like " I disagree with the U.S. foreign policy" as you will be labeled a terrorist and placed on a no fly list so you limited to "personal reasons" or "I got tired of being an American and want to try something new."

[CMBob]

It's funny that Americans prattle on about freedom and liberty but the actual reality is that they are all born into servitude. No matter where they go or what they do they have to pay the American government 32% odd of what they earn for their entire life.

Absolute baloney. We Americans pay a whole lot less tax to the central government than do all Europeans. Let's see, last year I paid less than 3% of gross income to the federal government. As you may remember, Mitt Romney paid 13% of $27,000,000 during the last presidential year. And Warren Buffet has annually reported exactly what percentage of his gross income he pays to the federal government.....and it's never exceeded 18% (and he, like many others, have railed against how little the wealthy pay to the federal government). And, depending on who's parsing the figures, anywhere from 43% to 53% of Americans pay no federal income tax whatsoever.

The highest theoretical federal income tax rate for income over $406,000+ of taxable income (which isn't "gross" income) is 39.6% for a single person. And I have no doubt that there isn't one person in the country who actually pays anywhere near that rate on their total gross income.

I might buy your 32% figure to some degree if you included all the taxes we pay (state taxes, city taxes, sales taxes, property taxes, gasoline taxes, excise taxes on certain goods, etc., etc.).

[tsigane]

It's funny that Americans prattle on about freedom and liberty but the actual reality is that they are all born into servitude. No matter where they go or what they do they have to pay the American government 32% odd of what they earn for their entire life.

Absolute baloney. We Americans pay a whole lot less tax to the central government than do all Europeans. Let's see, last year I paid less than 3% of gross income to the federal government. As you may remember, Mitt Romney paid 13% of $27,000,000 during the last presidential year. And Warren Buffet has annually reported exactly what percentage of his gross income he pays to the federal government.....and it's never exceeded 18% (and he, like many others, have railed against how little the wealthy pay to the federal government). And, depending on who's parsing the figures, anywhere from 43% to 53% of Americans pay no federal income tax whatsoever.

The highest theoretical federal income tax rate for income over $406,000+ of taxable income (which isn't "gross" income) is 39.6% for a single person. And I have no doubt that there isn't one person in the country who actually pays anywhere near that rate on their total gross income.

I might buy your 32% figure to some degree if you included all the taxes we pay (state taxes, city taxes, sales taxes, property taxes, gasoline taxes, excise taxes on certain goods, etc., etc.).

And why wouldn't you include all other taxes? It is the money they TAKE away from you and are free to do with it whatever they desire, without any accountability. 32% is probably on the low side, expect for the people who earn over 1 mil a year.

Americans may be paying a few percetage points less than Europeans do, but they get so much less in return from the government.

And if you're so patriotic, why do you brag about paying only 3%. I'm sure you could show your patriotism with more money. IRS would not mind it

[chickenslegs]

Boris will get at least $100,000 worth of publicity out of this.

He is no fool - he just acts like one.

[kimamey]

Glad I'm not American. As a UK citizen I am liable for tax on any income earned in that country and only in that country. Wherever I live in the world that rule applies. It could be that Americans have a human rights issue with this....

I think it depends how much time you spend in the UK. I assume you don't spend much if any time there. Even then there are arrangements with a lot of countries so you don't pay tax twice.

I don't know how it works in Boris's case. Maybe he can avoid the tax he'd pay in the UK if he has to pay it in the US.

[Credo]

Taxes paid in a foreign country are deductible on your US taxes.

[englishoak]

Price of being born in the land of the free..........

[Muhendis]

Glad I'm not American. As a UK citizen I am liable for tax on any income earned in that country and only in that country. Wherever I live in the world that rule applies. It could be that Americans have a human rights issue with this....

I think it depends how much time you spend in the UK. I assume you don't spend much if any time there. Even then there are arrangements with a lot of countries so you don't pay tax twice.

I don't know how it works in Boris's case. Maybe he can avoid the tax he'd pay in the UK if he has to pay it in the US.

The NHS system has requirements concerning time spent in the UK for people below retirement age which is, I think, what you are referring to. There is no time or age limit on income earned in the UK. If you have income from stocks and shares or property rental earned in the UK you will should be paying tax on it.

[Srikcir]

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Even if he renounces his citizenship, he still owes the taxes.

Through mutual tax treaties bewteen the USA and UK, the IRS won't have a problem seizing his UK bank accounts, property, etc. to pay the tax. And to make matters worse, he faces penalties that may double or triple his debt with the IRS.

[Srikcir]

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This is a violation of the Constitution. The fathers of the USA fought England because of taxation without representation. The king wanted them to pay tax even though they did not live in England. This is no different

This is why they fought the revolutionary war. This is truly taxation without representation So far no one has fought this in the courts but they will in time.

The colonists fought a war with Britain because they had no representation in the King's court. Many of the colonists were also citizens of Britain!

You might check Internal Revenue Code of 1954 Amended. It's called a "law." The constitutionality of federal taxation has been challenged in courts numerous times and defeated. As far as "taxation without representation," you should read the US Constitution on citizens' representation in the US Congress and the presidency.

[daveAustin]

Surely a line should be drawn on whether one was simply born to foreign citizens and then moved away as a kid from that country to live and earn in their ancestral home, and someone who was born there, lived and earned there and then moved away? Current policy makes America look a hypocrite and 100x worse than what they (ex Brits ) fought to extricate themselves from all those years ago.

[samran]

Surely a line should be drawn on whether one was simply born to foreign citizens and then moved away as a kid from that country to live and earn in their ancestral home, and someone who was born there, lived and earned there and then moved away? Current policy makes America look a hypocrite and 100x worse than what they (ex Brits ) fought to extricate themselves from all those years ago.

It's in the constitution, for better or worse.

[JockPieandBeans]

Glad I'm not American. As a UK citizen I am liable for tax on any income earned in that country and only in that country. Wherever I live in the world that rule applies. It could be that Americans have a human rights issue with this....

Think you better talk to an accountant.

If you have not went through the proper channels, you might be in for one hell of a shock.

[SheungWan]

Glad I'm not American. As a UK citizen I am liable for tax on any income earned in that country and only in that country. Wherever I live in the world that rule applies. It could be that Americans have a human rights issue with this....

Think you better talk to an accountant.

If you have not went through the proper channels, you might be in for one hell of a shock.

Yes he should because his understanding is quite incorrect. If he is a UK subject resident for taxation purposes he is liable for tax on income earned anywhere in the world and legally obliged to declare such income on his taxation returns. However, the UK does have dual taxation agreements with a number of countries and taxes paid locally overseas can be offset against UK liability.

[elgenon]

And so do I !!!!!!!

I pay 30 % alien taxes on a social security payment of $ 200.00 a month.

Aw come on. We all hate the IRS but if this were your only income you would owe nothing. There is a minimum you have to make before you owe any taxes. To be in the 30% tax bracket how much is your total income? Statements like this are quite ingenuous.

[Thailand J]

And so do I !!!!!!!

I pay 30 % alien taxes on a social security payment of $ 200.00 a month.

Aw come on. We all hate the IRS but if this were your only income you would owe nothing. There is a minimum you have to make before you owe any taxes. To be in the 30% tax bracket how much is your total income? Statements like this are quite ingenuous.

Sounds rediculous but it is true:

85% of your social security payment is taxed at 30% if you are a non-resident alien, a non-US citizen living outside of US.

Even if that is your only income; no minimum to meet, no deductions allowed.

The amount will be withheld. Instead of SSA1099, you will get a SSA-1042S every year.

You may not have to file 1040NR if that is your only income.

If you file 1040NR you must enter 85% of your benefit stated on form SSA-1042S in Shedule NEC, on Line 8 under 30%.

You will not get any witholding back unless there is a mistake.

Benefits received by residents of a few countries are exempted, too bad Thailand is not on the list.

Interesting reading: IRS Publication 915 page 5 and 20, 1040NR Instructions.