By Laura Saunders
U.K. Foreign Secretary Boris Johnson has given up his U.S. citizenship, according to a list released Wednesday by the Treasury Department.
The flamboyant British politician has said he intended to cut those U.S. ties. He previously was mayor of London.
The Treasury Department list includes the names of all people who renounced U.S. citizenship or long-term permanent residency in the latest quarter. A record number of 5,411 people renounced in 2016. That is 26% more than the next highest annual total since a disclosure law was enacted in the 1990s, according to Andrew Mitchel, an international tax lawyer who tallies the names on the lists.
Mr. Johnson, through a spokesman, declined to comment.
Mr. Johnson was a high-profile example of "accidental" American citizens who can owe U.S. taxes despite their foreign allegiance. He was born in New York while his British parents lived there during the 1960s but has said he hadn't lived in the U.S. since he was five years old. In 2014 he said publicly that the U.S. was "trying to hit" him for tax on the sale of a London home.
Experts concluded in 2014 that Mr. Johnson might owe at least $50,000 in U.S. tax on the home sale, and possibly more in penalties. In an interview with NPR at the time, Mr. Johnson called his U.S. tax bill "absolutely outrageous."
Unlike many nations, the U.S. taxes nonresidents on their world-wide income. While tax law and treaty provisions alleviate some problems caused by the law, gaps and pitfalls remain.
More people are renouncing citizenship, according to Mr. Mitchel, because of a tax-enforcement campaign by U.S. authorities and lawmakers in the wake of admissions by banks in Switzerland and elsewhere that they encouraged U.S. taxpayers to hide assets abroad.
To prompt compliance, a 2010 provision known as Fatca requires foreign financial institutions to report information about holdings by all U.S. taxpayers to the Internal Revenue Service.
This campaign has brought in more than $12 billion in taxes and penalties paid by individuals and financial firms, but it has complicated the financial lives of more than seven million Americans or dual-nationals living abroad, such as Mr. Johnson.
Many people have chosen to cut their U.S. ties, including Facebook founder Eduardo Saverin. Those who do so typically must certify that they have paid U.S. taxes for the previous five years, and there can be an exit tax for renouncers whose net worth is $2 million or more. It isn't known whether Mr. Johnson paid an exit tax.
Although the Treasury Department is required by law to publish quarterly lists of renouncers, the lists don't distinguish between those giving up passports and those turning in green cards, or indicate which other nationality the individuals hold.
In the fiscal year ended Sept. 30, 2016, about 753,000 people became U.S. citizens, according to a spokeswoman for the U.S. Citizenship and Immigration Services division of the Department of Homeland Security.
Write to Laura Saunders at email@example.com
(END) Dow Jones Newswires
February 08, 2017 17:56 ET (22:56 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.