QUESTION: My wife and I have a condo in Panama City Panama. We go
down about 3 times a year for about 10 years. In the past My nephew
had paid our monthly electric, phone and R/E taxes and I brought down
Cash to reimburse him. Two years ago, I opened a checking account in
Panama and had wired $1500 twice a year and allowed him to write
checks to pay for our bills.

After reading your newsletter, I am concerned that I may have a
problem since I didn't indicate that I had a foreign account. I
assumed that if there was no income generated, I was ok. How do I
rectiy the situation without being fined.

REPLY: It is not necessary to report a foreign financial account on
the federal tax return of a US taxpayer if the balance of all
accounts held by the taxpayer is less than $10,000 at all times during
the calendar year. The question in Part III of Schedule B of the Form
1040 do not state that this is an exception, but the instructions to
Form TD F 90-22.1 does provide this information.

Vern Jacobs

------------------------------------------------
ASSET PROTECTION AND TAX SAVINGS FOR INVESTORS
http://www.offshorepress.com/info-rm4ai.htm
-------------------------------------------------