LaPaz Blog

Paradise in La Paz

IRS Offshore Voluntary Disclosure

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Time is very short to take advantage of a semi-amnesty program offered by IRS to induce US expats to “come in from the cold” if they have not filed the proper tax returns, schedules, or paid taxes due from living or working abroad.

 

U.S. citizens are required to file returns every year, no matter where you live or work in the world. Some are afraid to file their returns because they have put them off for so long. Often little or no tax is due anyway, due to US foreign earned income exclusion and foreign tax credits.

Sometimes citizens learn too late of certain forms or schedules they were supposed to file, facing stiff penalties for the failure.Two of those forms include 3520 and 3520(A), which must be filed by March 15 each year if you have a foreign trust, including fideicomisos – the bank trusts through which certain homes in Mexico must be held by foreigners.

Steep penalties for failure to file these forms by the deadline could bankrupt the average homeowner, so many people just hope the IRS never catches them.

This is a dangerous practice that leaves the homeowner in a constant state of tension. IRS has a successful program to force foreign banks and other financial institutions to disclose names and information about all US citizens who have accounts. They match that data against the tax returns filed by those citizens.

Entering the Offshore Voluntary Disclosure Program will avoid criminal action and will also set a predetermined limit on the amount of penalties which may be imposed by IRS. The program ends September 23, 2009.

This Disclosure Program appears to be quite complex. The accountant/attorney who prepared our Forms 3520 and 3520(A) is Don D. Nelson. He also writes a column in the Gringo Gazette, in an English language paper in Baja.

If you need to take advantage of this program, we suggest you contact Mr. Nelson or another accountant who specializes in income tax situations for U.S. citizens living abroad:

donnelsonattycpa@yahoo.com – Email
www.TaxMeLess.com – Website
http://www.usexpatriate.blogspot.com/ – Blog
949-481-4094 – U.S. Phone Number
949-218-6483 – FAX

Hurricane Jimena – Kind To La Paz

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After the Category 5 scare, Hurricane Jimena almost seemed like a non-event as she passed by La Paz, staying to the west, with much diminished strength. Heavy rain and some local flooding, but no serious damage that we are aware of.

Others were not so lucky up north, in mid-Baja. Where Jimena hit landfall there was much devastation. Let’s all find out how we can lend a hand or contribute to repairing these peoples’ lives and livelihoods. Please contact the Red Cross or another legitimate organization providing aid.

We decided maybe we will spring for hurricane shutters after all (timing is everything…). Later we’ll give you the contact info for the man who is installing our hurricane shutters.

Jimena In La Paz

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What’s up with all these hurricanes in Baja?

When we put down the deposit for our home in La Paz five years ago, they told us there was hardly ever a hurricane near La Paz. At least one has come through almost every year since.

As I write, the powerful Pacific hurricane, Jimena, is heading toward Baja, with a path which may go over or very near La Paz. Last year Bahia Magdalena and Ciudad de Constitucion were badly damaged.

Jimena may stay slightly west of the peninsula – due to hit Wednesday so it’s still slightly early to tell the exact trajectory.

Let’s all pray that homes and especially all living things stay safe and dry during this storm.

La Paz Airport Security Screening

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Most first time visitors leaving through the airport in La Paz, Baja California Sur,  are caught by surprise when their beverages are confiscated prior to boarding.

This airport has a unique security screening process.

At every airport I have visited in Mexico, all bags are inspected by hand. The checked luggage is inspected  prior to check-in, but not the carry-ons. 

Then, even though you put them through the X-ray system, your carryons will be hand inspected prior to boarding.

The beverage policy, however, is unique at the La Paz International Airport. Perhaps this policy exists at other Mexican airports, but I have not experienced it.

Due to the heat, many visitors bring bottles of water and other beverages to the airport. They dutifully drink as much as possible, then dump the remainder prior to going through security. Then they buy new drinks inside the waiting area, expecting to take them on board.

Think again!

You are not allowed to board a plane in La Paz with any beverages, even those purchased inside the security check point. When your carryons are hand inspected prior to boarding, all beverages will be confiscated.

The good news is … you ARE allowed to bring your beverages through the security checkpoint, so there is no need to dump them. Bring them on in, just finish them up before your plane arrives.