President Ma Ying-jeou (馬英九) is to pay taxes to the US government as a permanent resident of the US, Next Magazine reported yesterday, prompting the Presidential Office to immediately issued a statement denying the allegation.
The magazine yesterday said that information provided by the Internal Revenue Service’s (IRS) Beijing office says that Ma is required to pay US taxes, even if — as he claims — his “green card” has expired.
In response, Presidential Office spokesperson Lee Chia-fei (李佳霏) said it is impossible that the president needs to pay taxes to the US government since his green card has been invalid for a long time.
Later in the day, Lee said Ma would resign if it turns out that he is required to pay taxes to the US government, but added that “[those politicians] who criticized Ma today will have to apologize and the magazine held legally accountable if the story turns out to be false.”
The office said that it does not rule out suing the publication for passing itself off as the president in the inquiry e-mail it sent to the IRS, which is a violation of the Criminal Code’s statute on forgery.
The magazine used Ma’s personal information in the e-mail asking whether he is bound by the US’ Foreign Account Tax Compliance Act to pay taxes there.
A screenshot of what the magazine says is the IRS’ reply was printed alongside the article and read: “As long as you hold a US Green Card, even if it expires, it doesn’t necessarily mean that you’re no longer US resident for tax purposes. For federal income tax purposes, you continue to have US resident status and is [sic] required to report and pay US tax on your worldwide income regardless of where you live.”
The reply then specifies three exceptions to the requirement: if the person “voluntarily renounce[s] and abandon[s] this [permanent resident] status in writing to the USCIS” (United States Citizenship and Immigration Services); if the green card holder’s “immigrant status is administratively terminated by the USCIS; or if the individual’s “immigrant status is judicially terminated by a US federal court.”
Ma said in 2008 that his green card, which he obtained in 1977, was “regarded as relinquished, therefore invalid, because it had not been used for a long time.”
However, if what Next Magazine reported the IRS as saying is correct, Ma would have had to voluntarily renounce his green card in writing to the agency to be exempt from paying US taxes.
“It is not known if Ma renounced his residency status in writing in the past few years. If he did, he was lying to when he said that not using the green card invalidates it; if he did not, he has to pay taxes to the US government,” the report said.
The report added that the president receives his salary as a direct deposit to his Bank of Taiwan account, which has agreed to provide information about US tax payers’ accounts to Washington under the US’ tax act.
Ma has an annual salary of NT$6 million (US$200,000), which means that he would have to pay NT$500,000 in income tax annually under US federal law, the magazine said.
“Even if he wants to renounce his green card now, he would have to pay an ‘exit tax,’ which is applicable to those who are renouncing their US citizenship or permanent long-term residency and who have been a green card holder for at least eight years and have a net worth of at least US$2 million,” it said.
The report estimated that Ma and his wife would have to pay a total of NT$30 million in exit taxes if they renounce their green cards now.
Lee rejected the claims, adding that, as Ma said during the 2008 presidential campaign, his green card was “automatically invalidated” when he stopped using it more than 20 years ago.
She also cited former American Institute in Taiwan (AIT) director Douglas H. Paal, who said that the green card becomes invalid when the holder stops using it for more than one year.
Underlining that the AIT will not “specifically address any individual’s immigration or visa situation, given US law and privacy considerations,” AIT spokesperson Mark Zimmer offered a similar explanation yesterday.
“It’s difficult to say in broad [strokes] … something about every situation, but in general, if somebody has a green card and they did not travel to the US for a year, then it expires,” he said.
He would not say if a person is still required to pay US taxes even after the document expires.
Some official US Web sites state that expiry does not equal loss of permanent residency status, such as that of the US embassy in Germany.
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