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.

Flu In La Paz? No Worries!

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With the swine flu media hysteria toning down, some of you may be anxious to head to Mexico. After a week in Baja, I feel confident to assure that you have a high probability of staying healthy in La Paz, all other things being equal.

I delayed my departure for an intended two-week trip due to a bronchial conditional lingering after a severe winter cold. Not the slightest bit concerned about catching the flu in La Paz, I was more worried about spending two hours in LAX and breathing everyone’s air in the planes.

After clearing Mexican customs in La Paz, travelers were greeted by a friendly crew of doctors and nurses who proceeded to give us cursory physicals, starting by pressing an instrument against our foreheads to take our temperatures. They handed out flyers stating that if we are sick, they want to help us.

There may be isolated cases of flu in La Paz, but no one I talked to heard of anyone who was sick. Some bank tellers and retail cashiers wore face masks, presumably as a preventive measure.

The weather was perfect (okay, 90 F. may sound hot to some people, but it FELT perfect!), I had a blast at the owners’ tournament of the first golf course in La Paz, and by the time I left in one short week, felt better than I have all spring.

If you have spring fever, I suggest you carve out two weeks and head to La Paz!