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H.R. 88, the Father's Equity Act, has been re-introduced by Rep. Shiela Jackson-Lee (D-TX). The bill, if passed, would modify the requirements for a US citizen father to pass citizenship to a child born abroad out of wedlock by allowing him to legitimate the child at any time. The child would also be able to apply for a certificate of citizenship after the death of the father.

Under present law, the US citizen father must acknowledge the child prior to the child's 18th birthday, and must accept resposibility for the child's financial support. Rep. Jackson-Lee has been attempting working for passage of the bill for several years. (contact info for Rep. Jackson-Lee and all Congressional representatives can be found via www.house.gov)

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Recent studies have found that almost 80% of expatriates would rather take another overseas assignment with a new employer than return home for a domestic position with their current employer. Additionally, almost 90% of expatriates would accept another overseas position with their current employer.

What are your thoughts about this? Have your perceptions of expatriate life changed since you first agreed to your first assignment abroad? Are you more willing to move to other parts of the world now that you have experience away from your home country?

Please e-mail any thoughts to: participate@expatexchange.com. Check out the newsletter at: www.expatexchange.net

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Pardon us for mentioning something so crass as money, BUT it does take dollars to keep even a non-profit run by volunteers running. By law, organizations such as ACA cannot receive US Government funding. Our major source of funding remains the hundreds upon hundreds of individuals worldwide who each donate their bit through membership dues and other contributions.

The annual ACA FUNdraiser evening, to be held this year on 14 March 2003 at the lakeside Beau Rivage hotel in downtown Geneva, is ACA's single largest source of annual income. All this is possible through generous contributions of individuals and firms and equally generous bidders. We'd welcome each of you in either (or both!) of these categories. Please contact the ACA office for further details.

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Siskind's Immigration Bulletin reports hearing in the past few months from numerous individuals around the world stuck outside the US waiting for security clearances in order to enter the US. Most of the time, the checks take just a few weeks. But there are persistent reports of delays of months and consulates appear to have little information to offer applicants to explain the delays. That is because the State Department submits requests for security clearances to the FBI in the United States and consular offices can do little to speed the process.

While the State Department has not admitted that there may be a problem, the American Immigration Lawyers Association is reporting that the State Department's Visa Office is instructing posts to re-submit security clearance requests for cases submitted on or before August 15, 2002 that have not yet been cleared. AILA is advising immigration lawyer members of the association to contact consular posts and request security clearance re-submissions if they have not already occurred.

Extensive coverage cncerning registration requirements can be read at the Siskind's Immigration Bulletin web site (www.visalaw.com).

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This week the INS added five more countries to the list required for special registration. The new countries placed in ăGroup 4ŕ special registration are Bangladesh, Egypt, Indonesia, Jordan, and Kuwait. The addition of these countries brings the total of countries named for special registration to 25.

Only males born on or before 24 February 1987, who entered the US in nonimmigrant status on or before 30 September 2002, are required to register. Those subject to special registration under this rule must report to a designated INS office between 24 February 2003, and 28 March 2003. They must present their passport, visa and other immigration documents, as well as evidence that they are working or studying in accordance with their nonimmigrant visa. They must also present proof that they are residing in the US. They will be fingerprinted and photographed, and must provide any additional information the INS requests.

Individuals subject to special registration will have a number of important requirements. Each year the person remains in the US, the individual will be required to reregister within 10 days of the anniversary date of the initial registration. Also, if an individual changes his address, employment, or educational institution, the person must inform the Service within 10 days of this change on Form AR-11 SR. Lastly, upon leaving the United States, the individual must appear before a Service officer at a designated port-of-departure and depart from that port on the same day.

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Reza Baluchi is an Iranian bicyclist traveled more than 46,000 miles across six continents on a tour for world peace until he ran into Border Patrol agents in Arizona two months ago. Since then, he has been in INS detention while officials try to figure out what to do with him. It is unclear when Baluchi's travels began, but it was certainly before the terrorist attacks in September 2001. He carries with him photographs of himself at various places around the world, including Africa, Europe and South America. He says he planned to finish his journey in Canada, but that the terrorist attacks prompted him to change his plans, seeking to arrive in New York City on the one-year anniversary of the attacks. He applied for a US visa at the consulate in Monterrey, Mexico, but because he is Iranian, processing took months. While waiting, he cycled around Sonora, and, on one occasion, got lost and ended up crossing the border. Baluchi has applied for asylum in the US, claiming that he is not Muslim and that he has been persecuted for violating fasting laws during Ramadan.

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According to the online newsletter of maritimeliens.com:

• All recreational and commercial boats used for business entertainment may require Coastal Trade Endorsement
• All boats may require licensed captains
• Foreign-built boats may be barred from business entertainment use in U.S. waters
• Many may lose boat's business entertainment tax deductions

The United States Custom Service recently has made changes in its interpretation of the definition of "passengers" that may negatively impact boat builders selling to the US market; United States service and repair facilities, retail sellers, lenders and insurers; and US boat owners who use their sail or powerboats for business entertainment purposes.

The United States Customs Service now interprets the definition of a "passenger" on a vessel being used for business or business entertainment purposes to mean any person onboard a boat while under way who is not directly involved in the operation, ownership, or navigation of the boat. Vessels carrying "passenger(s)" must be under the command of properly licensed operators.

Under the new interpretation, to carry a business guest (passenger), a boat must be registered in the United States Documentation System with a "coastal trade endorsement;" such an endorsement allows for the carriage of passengers for hire with a licensed captain in command. Only US-built boats qualify for this "trade endorsement," and must be of at least five net tons in its measurement, which is usually around 26' in length. Any boat built outside of the United States, whether considered recreational or commercial, could not be used for business entertainment purposes, as it would not qualify for a trade endorsement.

If this interpretation, and subsequent enforcement, of these regulations stand, it also calls into question the status of the business expense tax deductions for boats legitimately used for business entertainment.

At this time, the US Coast Guard Documentation Office may not even be able to process the volume of boats that will require conversion into the United States Documentation system under the new interpretation. And, it is also questionable as to whether the licensing branch of the Coast Guard could process the number of applications needed for captain's licenses.

Marineliens.com is currently working with a maritime attorney in the United States who is investigating the ruling and is awaiting explanation from the US Coast Guard, US Customs Service, and the Internal Revenue Service.

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With everything else going on in the start of this year-terrorism, the threat of war on multiple fronts, a sagging world economy, etc.-issues related to U.S. income taxation seem unusually mundane, if not downright irrelevant. However, it helps to keep in mind that the American system of taxation serves not only to collect tax to run the government, but also acts as a means of both promoting social policy and imposing political agendas.

It is interesting to see this phenomenon so clearly evidenced in the latest tax proposal by President Bush. The centerpiece of this plan is to eliminate the tax on dividends received by stockholders on the theory that dividends are currently taxed twice-once at the corporate level and a second time when the individual shareholder reports them as income. The hoped-for effect of eliminating tax at the second level is that stocks will suddenly seem more attractive so investors will rush back to the stock market-thus helping to end our long and painful recession. The political agenda achieved if all goes as planned is that a newly strong economy will be credited to Republicans in general and Bush in particular, thus insuring his re-election in 2004. (If that doesn't work there is also a proposal to accelerate the income tax cuts that are supposed to go in effect in 2006 and a plan to increase the child tax credit.)

Critics of these proposals raise a number of salient points. Three of the major criticisms are:

1. The problems with the economy at the moment stem from too much supply and not enough demand (not to mention the uncertainty and fear stemming from terrorism and the probable war with Iraq that keep the markets unsettled). Eliminating a tax on dividends and lowering tax rates are completely unrelated to these issues-especially since the tax savings will not put enough extra money in the average American's pocket that he will decide to go on a spending spree.
2. The benefits of eliminating individual tax on dividends would only benefit those that are already in the upper income categories, thus allowing the "rich to get richer". One expert calculated that the average benefit for those making less than $10,000 would be $6 while the benefit for someone making more than $1 million would be over $45,000! Most of us fall somewhere in the middle, but if most of your savings is in a 401(k) plan, don't get too excited-there will be no tax break for those dividends since they are already not taxed while in the plan-and when savings and dividends are withdrawn at retirement, all of it is taxed as ordinary income.
3. Last, but by no means least, the plan would cost "scores of billions of dollars" (according to the president's budget director) and add to a budgetdeficit that is expected to be around $250 billion by 2004-and those estimates do not take into account the cost of a war with Iraq.

Needless to say, this tax legislation will be hotly debated. The Democrats naturally plan to introduce counter-legislation that purportedly will benefit the lower and middle classes more directly. So the one thing we can be fairly sure of is that the tax laws will get still more complicated as compromises and deals are made in pursuit of social policy and political agenda.

This item courtesy of Jane Bruno, J.D., tax attorney and consultant with Bruno American Tax Services (www.americantaxhelp.com). She can be contacted at: jabruno@americantaxhlep.com or jabruno@mindspring.com.

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