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USA Went To War With UK Over Taxing...See The Irony

Contributed by Lynne Swanson
November 28, 2014

London Mayor Boris Johnson has a taxing problem.  The United States Internal Revenue Service (IRS) wants Mayor Johnson to help fund that country’s massive deficit.

Why? Simply because Mayor Johnson was born there to British parents.

On a recent National Public Radio program, Mayor Johnson called IRS demands for taxes on capital gains on his principal residence in London “absolutely outrageous.”  Asked if he would pay, Mayor Johnson emphatically said “No.”

Now, a Canadian woman has written to Mayor Johnson telling him “I know just how you feel.”  Ginny Hillis also points out the “USA went to war with the UK over off shore taxing in the first place. As in the ‘real’ Tea Party Revolution. I assume you well know your history? And that you see the irony?”

As “outrageous” as Mayor Johnson finds the IRS demands, he is silent on what he thinks of the American directives that every financial institution on the planet ferret out “US persons” (including anyone born in the United States who has not formally renounced or relinquished American citizenship) and report to the IRS total assets, account balances, transactions, account numbers and other personal identifying information.  Many banks are closing the legal bank accounts of “US persons” living in their countries—often as citizens like Mayor Johnson.

The United Kingdom was the first country to sign an Intergovernmental Agreement (IGA) with United States Treasury for British financial institutions to submit information to Her Majesty’s Revenue and Customs (HMRC) which will send on to IRS.

Canada and numerous other countries have signed similar agreements.  Ms. Hillis, a retired lawyer, and her co-plaintiff graphic artist Gwen Deegan are, to date, the only people in the world to challenge FATCA through court action.  They have launched a legal and constitutional challenge in Canadian Federal Court to the Canadian FATCA (IGA) enabling legislation with prominent Canadian constitutional lawyer Joseph Arvay and his colleague David Gruber.  

Ms Hillis and Ms. Deegan have some things in common with Mayor Johnson:

1.      All three were born in the United States.

2.      All three were citizens of other countries from birth because of their parents’ citizenship.

3.      All three left the United States at the age of five.

4.      All three have lived their entire lives as citizens of other countries.

5.      All three earn their income and pay taxes to their own countries.

6.      All three are publicly saying “No” to attempts by the IRS to claim them as American tax payers or tax evaders. 

In her letter, Ms. Hillis invites Mayor Johnson to join her and Ms. Deegan in fighting the IRS intrusion into their lives by launching similar court action in Britain. Here is the full text of her letter:

Dear Mr. Johnson:

RE: IRS

Yes, Boris Johnson I know just how you feel.

But the article is incorrect about the amount for the cut off and you would owe a lot more than just the capital gains on your house. Fines and exit fees could amount to hefty penalties for failure to file income reports when you, like a lot of of us, didn’t know about these until recently. Because the IRS never informed anyone or published their regulations in any way that the public would see.

The USA is the only country in the WORLD that taxes by citizenship, rather than residence. They need $$$ to fund their deficit and they are now going after every person in every country that they consider American. Like you, many people who lived in the USA for a few years or more who had no choice where they were born, never have considered themselves US citizens. You are a British citizen clearly. You have no ties to the USA. I know that feeling too.

However, to date there are only two people in the world, my co- plaintiff and I who are taking on this issue (in our true home country Canada, as full Canadian citizens, in our courts) because Canada entered into an agreement with the USA which turns over our banking information via our CRA. Just as the UK has done by entering into a similar intergovernmental agreement. As you are now finding out. I am not saying that to toot my own horn. I am saying it so that you might consider another option.

You might consider launching your own legal protest in the UK on behalf of people there like you, that the USA deems to be tax invaders. I bet that might be an interesting political launching pad for you, considering the USA went to war with the UK over off shore taxing in the first place. As in the ‘real’ Tea Party Revolution. I assume you well know your history? And that you see the irony?

And you have political cache that I don’t.

It’s not easy and it sure is expensive. But principles and access to justice are very important things to stand up for, in my opinion. Your mentor, Mr. Churchill would no doubt be proud of you if you did.

All the best, Boris.

Ginny Hillis,
Windsor Ontario, Canada

[Plaintiff in Canadian FATCA IGA lawsuit against Government of Canada]

As Ms. Hillis concludes, justice is “not easy and sure is expensive.” It is expected to cost $500,000 to reach Federal Court in Canada.  Depending on the outcome, appeals to the Supreme Court of Canada may be needed, requiring further financing.

The lawsuit is being funded through donations to the Alliance for the Defence of Canadian Sovereignty from Canadians and international supporters from Australia to Vatican City. So far, almost half of the amount needed has been raised.  To donate or learn more:  http://stopfatca.ca/

Ms. Hillis and others hope Mayor Johnson will make Winston Churchill proud and join the revolt against FATCA taking place right now in Canada with help from around the globe. If Mayor Johnson were to take similar action in Great Britain, it could serve as a New Independence War to fight unjust taxes of a foreign government.  Mr. Johnson has the “political cache” to do just that.

“I assume you well know your history. And that you can see the irony.”


Lynne Swanson is a retired Human Resources professional, writer, blogger and the Chair of ADCS Litigation Committee.  Born and raised in Pennsylvania, she has been a Canadian citizen for 41 years.

 

Tags: tax | Canada | United States | law | FATCA | court | Australia | banking | United Kingdom | legislation | fees | interest | Internal Revenue Service (IRS) | regulation | penalties | agreements | Tax

 

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I would be interested in reading a commentary authored by tax-news. What should a global tax convention look like? Should all countries adopt citizen-based taxation (CBT) policies? America has; why shouldn't everybody? What are the impacts of such a convention? Would America suffer? Does America really benefit now with all the expense to collect taxes on seven million citizens who some argue rarely pay any taxes anyway, so why all the hullabaloo? What makes sense here? How do we tax citizens around the world fairly and without undo burden on taxpayers? https://cafemoi.wordpress.com/2014/11/19/a-new-world-orders-tax-system/

John on Saturday, November 29, 2014

 

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