Is The IRS A Force To Be Reckoned With By Boris Johnson?

By Expat News

The Mayor of London Boris Johnson who was born in the United States, moved from the United States at the age of 5 and now holds an American passport, may have met his biggest match ever … the United States Department of Internal Revenue, more commonly known as the IRS.


Why did the IRS contact Boris Johnson?

The branch of the Federal Government that many, if not most, Americans have a dislike for, has notified Boris Johnson that he owes them for the sale of his London, England home. The IRS is stating that Mr. Johnson owes them for ‘unpaid capital gains’ on the sale. He and his wife purchased the home in question for £470,000 in 1999. In 2009 they sold the property for £1.2million and thus, the disputed tax debt.

This was the first home to be owned by Mr. and Mrs. Johnson and as such, the laws in the United Kingdom where the home is, they are not liable for any capital gains tax there. However, because Mr. Johnson is a U.S. citizen, he may be liable for as much £100,000 or more to the IRS according to tax and immigration attorney, Diane Gelon as published by

By law of the United States, it is required that all citizens must file a yearly tax return as well as pay U.S. taxes, including those with dual citizenship. The yearly tax return must include all income both in the U.S. and abroad. This is supported on the agency’s website with this statement:

‘If you are a US citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to US income tax, regardless of where you reside.’

Is Boris Johnson an Accidental American?

Just as Americans do with anything and everything, we’ve created a term for those who find themselves in the position that Boris Johnson has: Accidental American.

The term ‘Accidental American’ was introduced as the description of anyone that is a United States citizen but not aware of that status nor realize they are required by law to file U.S. taxes and all that comes with those requirements to report income, regardless of your residency. Those citizens are considered US Expats.

The United States has been somewhat lenient on U.S. expats, giving them the benefit of a doubt they weren’t aware of what was expected in regards to IRS filing requirements. It has only been relatively recent that the U.S. government has started cracking down on situations like Mr. Johnsons as they attempt uncover tax cheats living abroad and hiding assets. It is becoming more common knowledge that foreign assets and income must be reported to the United States IRS now and the laws are now being more strictly enforced as well. This is resulting in fines and penalties being charged to anyone who fails to report those things.

The Foreign Bank Account Report, aka FBAR, requires that all foreign bank account balances with an aggregate value of $10,000 or more during the year be reported now. As well, the Foreign Account Tax Compliance Act, aka FATCA, requires that if certain thresholds are exceeded, then foreign assets be reported as well.

Not only has Boris Johnson and his wife have the proceeds from the house they sold, but Mr. Johnson has a salary of £144,000 for his position as Mayor. He also has a salary he is paid for his column in the Telegraph in the amount of £250,000 annually. All this combined puts Mr. Johnson well above the foreign-earned income exclusion threshold of £62,000 or $97,600 in American currency.

The Conservative mayor of London is refusing to pay the United States IRS which has drawn attention around the world. He feels the claims and demand of this American branch is ‘outrageous’, seeing that in his resident country, the United Kingdom, isn’t even taxing him on the sale of his first home.

Is Renouncing His American Citizenship The Answer?

Some wonder why Mr. Johnson just doesn’t renounce his American citizenship. The number of renunciation is on the rise and there are various reasons (click here to read What drives Americans to renounce US citizenship). However, just as the United States has laws and rules in place that one must claim all income acquired abroad, they also have strict laws and rules in regards to renouncing your citizenship.

Mr. Johnson will have to pay up any owed taxes he has acquired in the past 5 years before he can renounce his citizenship. Some US Expats that were unaware they are required to file could find what they owe to be irrational and decide its not worthwhile. Moreover, the State Department has increased the renunciation fee as well to $2,350, up from the $450 it has been.

Boris Johnson is only one of millions of US Expats living abroad that might owe the United States Federal taxes. It is estimated that of the almost 8 million Americans that live abroad, probably half of them are filing their annual US tax report of their assets and income. Most are not trying to avoid paying the taxes, but more likely, they aren’t aware of the laws.

In November, Mr. Johnson was quoted as saying ‘You may not believe this but if you’re an American citizen, America exercises this incredible doctrine of global taxation, so that even though tax rates in the UK are far higher and I’m Mayor of London, I pay all my tax in the UK and so I pay a much higher proportion of my income in tax than I would if I lived in America.’

When asked if would be paying the taxes owed to the United States IRS, his reply was ‘I could but I pay – I pay the lion’s share of my tax, I pay my taxes to the full in the United Kingdom where I live and work’ and then responded ‘Well, I’m – no is the answer. Why should I? I haven’t lived in the United States for, you know, well, since I was five years old.’

Can Boris Johnson minimize his US expat tax bill?

There are several ways for Boris Johnson to minimize his US expat tax liability. Hopefully, he has already hired a legal team to represent him in front of the IRS.

However, two important questions are on the mind of many people who follow this case…Will Boris Johnson pay potential US tax due? And, will he renounce his citizenship? The time will tell…

What do you think?