Internal Revenue Service – Expat Information – FBAR Form TD F 90-22.1

The IRS requires that the FBAR form be filed annually:

Who must file an FBAR:

United States persons are required to file an FBAR if:

  1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
  2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

See the full IRS guideline at: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-(FBAR)

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

TD F 90-22.1 can be found at:  http://www.irs.gov/pub/irs-pdf/f90221.pdf

The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.

The filing date is June 30 of each year. Add this one to your calendars.

Social Security – Expat Infromation – Part 2 – Proof of Life Form 7162

Yesterday’s post was an overview of the regulations as they pertain to Expats living abroad. Today’s post is regarding the Form 7162 Proof of Life that is required to be completed by all recipients of Social Security benefits living outside of the US.

you can find the form on this web address:
For those living in Ecuador please complete the form and scan along with a copy of your passport and email to:
Quito, CONS Federal Benefits (fbuquito) at their email address:
fbuquito@state.gov
If you are in another country please file with your local Consulate in that country.
By the way, if you are a permanent resident of Ecuador and using a relative or friends address in the US in this matter, you are not compliant.
The Social Security Administration will be sending out a letter requesting that a Proof of Life Form 7162 be completed according to the following schedule.

If your social security number ends in 00 through 49, your letter will be mailed out in May and June of even numbered years.

If your social security number ends in 50 through 99, your letter will be mailed out in May and June of odd numbered years.

The letters for 2013 will be mailed out between May and June (this month and next month). If you fall in the odd numbered years and have not received your letter by August, you have a problem.

The responses to those letters will need to be received by the SSA. If they are not received, the checks (or direct deposits) will be stopped! This usually catches the recipients by surprise and they wind up having to contact the Federal Benefits Unit in the US Embassy in Quito to get the check flow turned back on. This is not instantaneous and many living in Ecuador find themselves with financial problems. No money will be lost, but you may be without money until the problem is solved.

So what do you need to do?

1. The obvious answer is to have a mailing address in Ecuador. It can be general delivery or PO Box, but it must be in the country where you reside. Joe and I have not received any mail since moving to San Clemente.

As all of us that live here know, General Delivery and even PO Boxes do not insure that you will receive the letter in Ecuador. That is why you need to mark your calendar for August and if no letter has been received, then you need to contact the FBU in Quito or just complete the form and submit it.

2. If you have a noncompliant US mailing address, you can complete Form SSA-21. http://www.ssa.gov/online/ssa-21.pdf

Form SSA-21 is going to ask for a mailing address. Then you need to send it to the FBU in Quito and they will notify SSA of your new address and your payments will continue.

Because we do not receive regular mail here in Ecuador, Joe and I have decided to complete the Proof of Life Form 7162 annually so as not to forget one year and get cut off. In the past we have sent this form with someone going back to the states to mail on our behalf. This form is not new and SS has always allowed you to have an address for correspondence purposes separate from your physical address. It just seems that they are slowly trying to get those who actually live outside the US to tell them.  There is another Federal Form the IRS requires called FBAR (more on this form in my next post). It is for reporting bank accounts outside the US. When the IRS determined there was widespread under-compliance, they announced an amnesty program to get folks to file.  Followed by an announcement of very stiff fines and penalties if you did not come forward voluntarily.  They now go direct to many foreign banks and ask them for a client list of Americans, threatening economic retaliation for not cooperating. All Social Security will do is cut you off for a few months until you straighten things out but you get your money and no penalties. Hope that doesn’t change.

Social Security – Expat Information – Part 1

This will be a several part post about old and new requirements from the Social Security Administration as it relates to those of us living outside of the United States,

A form, Proof of Life, will be required from Social Security for folks living outside of the United States and receiving social security benefits. I will cover that form in the next article because it is such an important topic for those of us who rely on those funds for our existence, that I am not going to rush over the guidelines as they apply to us living out of the US.

First please read what Social Security has to say about using addresses in the United States if living in a foreign country for over three months.

https://secure.ssa.gov/poms.nsf/lnx/0202401080

Social Security Online  POMS Section: GN 02401.080
www.socialsecurity.gov

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Effective Dates: 04/20/2004 – Present

TN 17 (04-04)

GN 02401.080 Use of United States Address by Beneficiary Abroad

A. POLICY – WHEN PERMITTED

A beneficiary abroad may use a U.S. mailing address when the beneficiary:

  • Has an APO/FPO address;
  • Has a representative payee in the U.S.; or
  • Will be abroad for 3 months or less.

The beneficiary must keep SSA advised of his residence address at all time for beneficiary contact and foreign enforcement purposes.

B. POLICY – WHEN NOT PERMITTED

A beneficiary abroad may not use a mailing address in the U.S. when the beneficiary is:

  • In a barred country (RS 02650.001); or
  • Abroad for more than 3 months.

Checks for beneficiaries abroad more than 3 months may not be sent to a relative or friend in the U.S. except during interim periods while developing a proper mailing address.

A beneficiary living outside the U.S. may have a foreign address and direct deposit to a U.S. financial institution (FI). See GN 02402.110. See also International Direct Deposit, GN 02402.201.

See GN 02402.080 for the use of a Power of Attorney when International Direct Deposit is not available in the country of residence and the beneficiary wants checks mailed directly to an FI in the country of residence.

 

Happy Anniversary to Joe and I

Yesterday was our 39th wedding anniversary. And we attempted to take a serious photo but this is how the first one came out.

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Then after Joe stopped being funny we got this one.

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Okay, so he was still acting silly. This next one looks pretty good.

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Joe took me out to Viviana’s for a lovely dinner and our celebration was complete.

Update on Sonia’s House

John Trim this post is especially for you. Thanks for giving me the little push that I needed to go take more pictures.

April 12th was my first post on our neighbor Sonia building her little house at the end of our street. I know it has been weeks since I posted sorry life has just gotten in the way of making any time for posts to this blog. But this morning I walked by and was amazed to see the outside walls completed and all the work that is being done on the inside. Sonia told me it would be done in two months and I did not think that it would be possible. Keep in mind workers are not working on this house every day, she schedules folks to work as other jobs are completed so there have been many days when no work has been done.

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They have added a bathroom to the back of the building and right now it does not have a roof. It is located between the kitchen and the salon area. It looks like the electric and plumbing are in place and the two bedrooms are getting the concrete skim coat today. Sure looks to me like they are on schedule to complete this fast.

CNEL Electric Company

About the middle of last September 2012 I figured out that our electric meter was not working at all. Our bills for the previous two months had been $5 and $5.79. The first bill of $5 did not hit me as being odd because we were not living in the house, they were replacing all the electrical wiring, light fixtures and electric plugs so we really had no electric usage, plus they were running extensions from our rental to run their equipment. The second month having a bill of $5.79 I just thought that is what the usage was because again the house was under construction and really very little power was being used. Then we moved into the house and one day I just took a look at the meter and it was not moving. I wrote down the meter reading and looked a few days later, it was the same – that is when I knew for sure that the meter was dead. I talked to Patricia about the process of getting a new meter installed and her advice was to visit the local CNEL office in Charapoto and inform them of my situation.

Because my Spanish is not good enough to explain what the problem was, I wrote a letter in Spanish with the help of Google Translate, simply stating that the meter was not working and that I needed a replacement. Attached to this letter I had copies of the electric bill from our closing (because electric bills are not received here you just need to know when to pay it), my cedula and censo, the first five pages of our deed showing that the property was in our name and a photo of the meter just for good measure. This was October 5th. The young woman asked if I have air conditioning which we do not but will eventually add to our master bedroom. I then noticed why she was asking that question – there are two different meters one for 110 volt and one for 220 volt. We will one day put in the a/c unit so we require a 220 volt meter. She updated her list with that information and we left.

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On Tuesday, October 30th 2012 while Joe and I we walking out of the gate I noticed a CNEL truck parked on the street at Gina and Jorge’s (Tututa’s) house directly behind ours. The guy was looking around like he was lost so I knew they were looking for us. I said to Joe let’s just wait around for a few minutes to be sure and I was right they were here to see us. Of course neither of these workers spoke any English but the one man keep saying multa, I had never heard that word before so I had Joe look it up in our Spanish/English dictionary. That is when Paola, our neighbor came over to try to help. She knows our language skills are pretty basic and tried to reason with the one guy. She suggested that I have Patricia talk to him, I knew that Patricia was at the dentist out of town that morning and I really did not want to call her, but I did. She was available to speak to the CNEL employee and after talking to him three different times she finally figured out that he wanted us to do was give him a bribe. The reasoning was that he would report the meter as newly nonfunctioning and we would not be liable for any back charges.  He was telling us if we don’t pay him we have to go to Manta to get a meter, and on and on.  Problem is we don’t play that way. Our comfort level is simple. We want to pay what is right not the underhanded way around things. That is why I went to the CNEL office in the first place instead of waiting until someone figured out that the meter was broken and came to us. Joe and I pay our way, we have always paid our own way and will continue to do so.

The bottom line is an inspector will be sent out to our home, a new meter will be installed and I will be ready with a letter translated into Spanish that I will have Patricia review stating the facts of our living in this house.

This is only the third time we or our representatives have been approached for a fee, money for a coke, a multa or in my words a bribe. The first was when we were having our luggage brought from Puerto Lopez to Salinas and our driver was stopped by the police and they saw our luggage in the back of his car, looked at our luggage tags which didn’t match his driver’s license, and requested a tip of $10 to allow him to continue to Salinas. Our driver paid so we paid him back. The next time was when our attorney on the purchase of this property was trying to figure out what the holdup at the municipal office was on our deed.  The inspector was looking for a bribe to move things along regarding the inspection of our property. Our attorney stated that her law firm does not do that, which we fully support.  I find it sad that an electric company employee was so callous to ask for money to do something he is already paid to do. And am even sadder that I did not take his picture for the blog.

I know that is how things are done here but I fear that one day down the line if we just paid the multa someone from CNEL would figure out that we did not pay our bill and I would end up having to pay twice.  Once for the bribe and again for the electric usage.

Believe me Joe and I are not “holier than thou” but if this is going to be our long-term home we must handle ourselves in an honorable manner. To give in to this type of treatment will only give these company employees the idea that all Norte Americanos are dripping with money and can be shaken down.

I wrote this on February 4th, we still have no meter. Things move slow in Ecuador, you just need to go with the flow!

Others may handle this differently. Everyone should do what is comfortable for them. Your mileage may vary.

UPDATE

Today May 7th 2013 a gentlemen came to the gate and I assumed it was CNT the telephone company with our new telephone line but I was mistaken it was two or three truckloads of CNEL employees. They have replaced every single electric line on the poles and are now completing the electric lines to the individual homes. As a side note: Joe and I just had the line from our electric pole to our home replaced by Serano about three weeks ago. But they needed to replace it with what CNEL is using so we have all new wiring twice in the past three weeks.

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If you drive down our street you will be amazed to see beautifully positioned wiring going from each home to the pole instead of the crazy maze of wiring of all different colors dangling like party streamers. It was a professional job done with a minimum of discomfort on our part. Joe and I did go out and clean up the bits and pieces of junk left but that was a small price to pay for such fine work.

Check this out our bright new shiny meter.

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Now lets see what this beauty is going to cost me and then lets see how they go about charging me for electric usage since last September…Oh, and no bribes today but there was plenty of glasses of water all around and I gave our neighbor Pilly $3 towards the beer he was getting for them all as the day wore on and the sun got hotter – it’s the tropics you know.  The nicest thing about the whole day was the look I got from Pilly when I offered the money, I think he was teary-eyed because of my offer. I feel he knows who I am, and that I get him. Cuz these are just the nicest folks we’ve ever been privileged to live near.