Talk about being born with a silver spoon in your mouth: the royal baby of Prince Harry and Meghan Markle will have a particularly glittery one.
And US tax authorities will be keen to know how much that utensil is worth
That’s because the baby will have dual nationality: British because of his father and US from his American mother, whose official title is the duchess of Sussex.
“When one of the parents is American and has resided in the US for five years with at least two after the age of 14, the baby is automatically a citizen,” said David Treitel, founder of American Tax Returns, a consultancy for US expatriates living in Britain.
“This is the case with Meghan,” said Treitel, noting this case is a first in the British royal family.
US nationality comes with a bevy of restrictive conditions: like any American who is born, grows up and dies anywhere in the world, year after year Meghan and Harry’s child will have to show the Internal Revenue Service his or her tax status is clean.
From the moment of birth, money deposited in banks by the royal parents — eager to ensure a bright future for their progeny — must be duly reported to the tax man.
The same would apply to money that comes in if mom and dad decide, say, to have the child follow in the footsteps of his ex-actress mother to become a star on TV or in movies.
– ‘Accidental Americans’-
Forget about privacy, said Treitel. The IRS will “get to know a lot more about the couple’s wealth” through the tax returns of the couple and their mother. “A lot more information is gonna get to the US,” he added.
To wit: the IRS will demand that any valuable gifts from non-Americans to Harry and Meghan’s child — and he will be feted, won’t he? — also be declared as assets.
“Imagine the queen giving the baby some nice beautiful book of art from the royal collection, with paintings by Van Gogh or Miro. If this gift if worth more than $100,000, it is reportable,” said Treitel.
However, baby shower gifts that Markle received recently in New York will not have to be declared if they came from fellow Americans, the expert said.
And although the baby and the mother will have to present forms that will be very time-consuming for their accountants, they may still not have to pay a lot in tax: these may be offset by duties paid in Britain, tax specialist Laura Saunders told The Wall Street Journal.
US tax authorities’ efforts to keep a close watch on American expatriates can have serious consequences for people whose sole link to America is that they were simply born there.
Such is the case of so-called “Accidental Americans” — such as thousands of people in France who automatically received US citizenship because they were born in the US but left America as little kids and no longer have any links whatsoever to the country.
– Fines –
Since the adoption of the Foreign Account Tax Compliance Act in 2010, which replaced the criterion of nationality with that of tax domicile, these people are obliged to report their income to US tax authorities and in some cases actually cough up some money.
Many of these people left the US when they were very young. The Association of Accidental Americans that brings them together asked President Donald Trump last year to find a solution to their quandary.
Their status can be a touchy subject. If they refuse to play ball with the US tax authorities, their banks at home can be sanctioned. So these institutions can refuse them services like bank accounts and mortgages.
To a lesser extent, the British royal family cannot dodge its US tax obligations either: a flawed tax return can trigger hefty fines.
But there is a solution to avoid headaches for the royal couple’s accountants: Meghan can renounce her US citizenship. However, even if she does that, tax returns would still have to be filed for the child until age 18.
Trump aides living in fear president will blow up their impeachment strategy: report
President Donald Trump's aides are looking at the Senate impeachment trial as an opportunity to show they can work together and not get torn apart by infighting and power struggles.
White House officials have settled into specific roles as the House wraps up its impeachment inquiry, and White House counsel Pat Cipollone will lead the president's defense in a Senate trial Republicans hope to make as quick and drama-free as possible, reported Politico.
These 14 widely-believed ‘facts’ are completely untrue
Life is full of commonly believed myths and people’s behavior is often guided by those truisms. But are they true? Some are, but many are as false as the idea that tax breaks magically create jobs.
Here are 14 common beliefs that turn out to be fiction; and five more that scientists have discovered are surprisingly true.
1. Talking on your cell phone will give you cancer.
There has been lots of talk over the years about how the radiation from cell phones may be causing brain tumors. As it turns out, not so much. An annual report from the Presidents Cancer Panel found no evidence to support the link between cell phones and malignancies. In fact, while talking on cell phones has increased by sixfold since 1991, the number of brain cancer incidences has actually dropped by half.
George P. Bush failed to disclose financial interests in nearly a dozen companies
After the Texas Ethics Commission received a sworn complaint about the omissions, Bush told The Texas Tribune last week that he took immediate steps to correct his disclosure forms.
Texas Land Commissioner George P. Bush failed to disclose his ties to at least 11 companies, including a Cayman Islands-based oil and gas firm that did business with a state fund he helps oversee, records obtained by The Texas Tribune show.
Arabella Exploration, which declared bankruptcy in 2017, put Bush on its board in January 2014, paid him $43,000 for his service and granted him stock options that were valued at over $100,000, regulatory filings show. The next year, a few months into his new job as land commissioner — and about a year after he left the Arabella board — the School Land Board, which Bush chairs, approved a lease agreement with Arabella for oil and gas exploration in West Texas, records show.