November 23, 2014 22:23:00
By Winstone Group Inc. | Attorney Salazar, Alberto
Alberto Salazar, International Tax Specialist, claims Boris Johnson, the mayor of London, who was born in New York and holds a US passport as well as a UK passport, will pay the IRS the US capital gains tax on the sale of his residence in the UK.
Rule: All US citizens and residents, including those with dual citizenship, are legally obliged to file a tax return and liable to pay US taxes on world wide income, regardless of where they live and regardless if the income is earned abroad.
Mr. Johnson has not lived in the US since he was a child and lives and works in the UK. Mr. Johnson can and will pay the capital gains tax, despite his current position that he pays the lion's share of his taxes in the UK.
Having the IRS on his back as he bids to return to parliament at the next general election will be cumbersome and a distraction.
While he is at it, he will have to report and pay taxes on his earned income to the IRS. He earns well above the foreign-earned income exclusion threshold of $97,600.
The clincher, the IRS will confiscate more than half his wealth for his failure to file the FBARs, FinCEN Report 114, Report of Foreign Bank and Financial Accounts. The IRS will take the greater of $100,000 or 50 percent of the balance in the account at the time of the violation, for each violation, plus accrued interest and interest on penalties. There are civil and criminal penalties for negligence, pattern of negligence, and willful violations. FBAR civil penalties have varying upper limits, but no floor and the IRS has discretion in determining the amount of the penalty.
The London mayor will either pay and renounce US citizenship or negotiate a deal with the US government. As you may know, the US government is delinquent of 7mil pounds to London's City Hall for vehicle congestion charge.