A "tax grab" affecting thousands of US citizens living in Australia is also plaguing West Australian Opposition Leader Mike Nahan who says his potential liability with the Internal Revenue Service may be expunged.
Michigan-born Dr Nahan on Tuesday revealed he remained a dual citizen because the process of renouncing his US citizenship, which began shortly after he was elected in 2008, hadn't been finalised as the IRS believed he had a sizeable tax bill.
The former treasurer elaborated on Wednesday, saying he had a potential liability, not an outstanding debt, after US law changes led to the IRS attempting to levy an additional tax on the investment in and earnings of Australian superannuation funds.
Dr Nahan said he was waiting for the outcome of several legal actions challenging the US government's right to levy the tax before resolving his own case.
"I will, if it is confirmed my tax liability is legal, pay the tax owing," Dr Nahan said.
"Alternatively, as I expect will happen, the tax liability will be expunged."
Dr Nahan made the surprising disclosure amid debate about whether WA parliamentarians could be considered ineligible to hold office due to dual citizenship-related issues.
Unlike federal parliament, dual citizens are allowed to be MPs in WA.
But under the state's constitution, they could be considered to be demonstrating an allegiance to a foreign power if they apply for or use a foreign passport, which may be grounds for disqualification.
Premier Mark McGowan obtained advice from Solicitor-General Peter Quinlan, who said it would only be a problem if MPs used or sought a foreign passport after they were elected.
Mr McGowan said Dr Nahan should have revealed his IRS problems sooner.
"If you have a financial dispute in which you potentially owe hundreds of thousands of dollars to a foreign government and you're the alternative premier for Western Australia you should have declared that," Mr McGowan told 6PR radio.
"I would have thought that was obvious.
"If you want to be the premier of the state, you've got to make sure that you are completely above board on these sorts of financial matters and not beholden to a foreign government."
Mr McGowan also dismissed criticism of Corrective Services Minister Fran Logan for using his British passport to avoid airport queues on a recent UK trip.
"I don't think anyone could seriously suggest that's swearing allegiance to a foreign power - I just think that's a silly interpretation."
Mr Quinlan will become the new Supreme Court chief justice later this month and may adjudicate the issue if it ever goes before the courts.
Share
