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(506) 2223-1327                        Published Friday, Feb. 24, 2012, in Vol. 12, No. 40                            Email us
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U.S. tax bill would end foreign income exemption
By the A.M. Costa Rica staff

Democratic members of the U.S. Congress are trying to eliminate the overseas income exemption that allows citizens in foreign lands to earn up to $92,900 a year without paying Stateside taxes.

The legislative change is deep inside the so-called Tax Equity and Middle Class Fairness Act of 2011. The measure would eliminate health savings accounts, certain expense provisions and some depreciation rules.

For U.S. residents living overseas, the major issue is the repeal of the exemption that is designed to keep them competitive with foreign workers. The United States is the only country in the world that taxes its citizens even if they live in another country and pay taxes to that country, according to American Citizens Abroad, an expat advocacy group.

American citizens Abroad has launched a campaign to get the clause eliminated from the bill. The measure contains a number of unrelated items that are being pushed by President Barack Obama.

The bill was introduced by Rep. John Tierney of  Massachusetts. The five cosponsors are Steve Cohen of Tennessee, Keith Ellison of Minnesota, Raul  Grijalva of Arizona, Jesse L. Jackson, Jr., of Illinois and Betty McCollum of Minnesota. Due to local politics, Ms. McCollum and Ellison are listed as members of the Democratic-Farmer-Labor Party.

The measure, H.R. 2495, is being considered in the House Ways and Means Committee. The wording of the bill characterizes exemptions, deductions and depreciations as tax expenditures.

“Ironically, the bill does not touch the foreign housing exclusion which allows Americans the possibility of excluding some foreign housing expenses from their U.S. taxable income,” said American Citizens Abroad.

“Actually, this particular paragraph in H.R. 2495 could hardly be expected to increase tax revenue by the promised amount of $5.4 billion as U.S. taxpayers living abroad would start using various tax credits such as foreign taxes paid in an effort to reduce their U.S. tax bill,” said the organization.  “Filing U.S. tax forms will become even more complicated for Americans abroad and tax revenue will not increase.”

The organization noted that Americans living overseas pay taxes to the local government. The organization is campaigning in Congress to reform the tax system to one that is based on residency instead of citizenship.

In other words, U.S. citizens who are legitimate overseas residents would not pay U.S. tax on foreign earnings.

The Geneva, Switzerland,-based association noted that the citizenship-based taxation by the United States has cause hardships with the new Foreign Account Tax Compliance Act.

This 2010 measure has caused foreign banks to close accounts held by Americans due to the complexities of the U.S. Internal Revenue Service reporting requirements.

Another expat advocacy group that also is targeting the Tax Compliance Act is the Association of Americans Resident Overseas, based in Paris, France.

The U.S. rules of the foreign income tax exemption are HERE!

An Academic paper posted online by Ryan M. Borgmann gives a concise history of the foreign tax exemption. He notes that U.S. citizens did not pay taxes on overseas earnings until 1953 when Congress put a $20,000-a-year cap on it. Congress tried to eliminate it completely in 1976, he noted.

 He is a lawyer who did the paper as part of graduate work on taxation at the DePaul University School of Law in Chicago, Illinois.

Series of eruptions reported at Rincón de la Vieja
By the A.M. Costa Rica staff

Volcano experts from the Red Sismológica Nacional were at the Volcán Rincón de la Vieja Thursday to study the site where neighbors reported an eruption between 4 and 4:30 a.m.

The Red Sismológica said that it appears that the eruption was contained inside the volcano's crater. An earthquake sensor 3.5 kilometers from the crater says that there were other eruptions. One was Sunday at 16 minutes after midnight and one was Monday 46
minutes after midnight. They were small, said the Red Sismológica.

The last major eruption at the mountain was in September when material came out of the crater after explosions and polluted nearby streams.

Parque Nacional Rincón de la Vieja is about 25 kilometers or about 15.5 miles northeast of Liberia in Guanacaste. The volcano is 1,916 meters high or about 6,286 feet. It is part of the mountain range that is the spine of the country.

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Weekend is shaping up
to be another winner

By the A.M. Costa Rica staff

These are easy days for Costa Rican weather forecasters. Sunny, hot with some clouds and sometimes windy conditions.

That is a forecast they could run off on a copy machine from Christmas until mid-March.

Of course, there always is the chance of some rain on the Caribbean coast this time of year. Such is the case with the forecast for the weekend. An increase in atmospheric humidity means there may be some weak showers in the northern zone and the Caribbean, according to the Instituto Meteorológico Nacional. And maybe even some showers in the mountains of the Central Valley in the evening, the forecast said.

So according to the weather forecast, the morning in the Pacific coasts will be sunny with some clouds in the Central Valley and perhaps showers in the mountains. Partly cloudy or cloudy skies will dominate in the northern zone and in the Caribbean with the possibility of showers.

Afternoon in the Pacific will be clear with winds from the north while in the Central Valley the clouds will be dispersed by the winds.  Again there is a chance of afternoon showers in the Caribbean and the northern zone.

Evenings may bring showers to the Caribbean and the northern zone while the skies over the Pacific are expected to be nearly clear or partly cloudy.

Highs are likely to be around 30 C (86 F) in the Central Valley, the Caribbean and the northern zone and perhaps as high as 35 C (95 F) in the north Pacific.

The Central Valley may see overnight lows in the 13 C range, some 55 F.

Find out what the papers
said today in Spanish

By the A.M. Costa Rica staff

Here is the section where you can scan short summaries from the Spanish-language press. If you want to know more, just click on a link and you will see and longer summary and have the opportunity to read the entire news story on the page of the Spanish-language newspaper but translated into English.

Translations may be a bit rough, but software is improving every day.

When you see the Summary in English of news stories not covered today by A.M. Costa Rica, you will have a chance to comment.

This is a new service of A.M. Costa Rica called Costa Rica Report. Editor is Daniel Woodall, and you can contact him HERE!
From the Costa Rican press
News items posted Monday through Friday by 8 a.m.
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San José, Costa Rica, Friday, Feb. 24, 2012, Vol. 12, No. 40
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Travel insurance is usually a good bet, but not for everyone
By the A.M. Costa Rica staff

Medical evacuation flights costing tens of thousands of dollars, emergency surgeries and unplanned doctor visits are all reasons any vacationer or expat should have some sort of medical coverage before living or traveling abroad in Costa Rica. But for both short- and long-term stays out of country many people are left either unprepared before leaving home or confused by the complicated landscape of international medical coverage.

When Elissa Merritt, a vacationer from Minnesota, prepared for her birthday trip to Costa Rica Feb. 8 with her husband, one of the last things on her mind was how to pay for astronomic hospital bills in a foreign country. That is until she drove her all-terrain-vehicle over the edge of a cliff near Jacó two days after her arrival.

What resulted was not only a dangerous battle for the preservation of her health but an international medical insurance nightmare for her and her husband, Ron Merritt, as they struggled to cope with a $25,000 hospital bill and thousands of dollars more for a medical evacuation to the United States.

An example of a medical travel insurance plan in Costa Rica, through the Instituto Nacional de Seguros, costs $84 and would cover a vacationer for two weeks and up to $20,000 for a sudden illness or accident-caused medical expense. That same plan can be extended to 26 weeks for $272 and other travel insurance plans, such as those offered by one of the 23 companies brokered through Squaremouth, can provide coverage for up to three years. Certain extreme sports and dangerous activities are not covered under certain plans.

Merritt said he and his wife were able to take a medical evacuation flight and make it back to the United States. Merritt said the medical evacuation flight was pre-approved by his insurance company and he expects their provider to cover the medical costs incurred as well.

The couple were medical evacuated back to Minnesota Monday. They had been in Florida for about a week while Mrs. Merritt underwent medical procedures. She will have six months to a year of rehabilitation.

Mrs. Merritt is alive but still undergoing extensive treatment for the three broken limbs and blood clots. Chad Swenson was not so lucky.

Swenson was rafting with his wife in Costa Rica in October 2010 when a tree branch struck him in the head. He was duck taped to one of the rafts as a makeshift stretcher and walked out of the jungle. It was 15 hours before he was seen by a medical specialist. Furthermore the couple was left without medical coverage costs, and Swenson was stuck in the country until members of the Texas community where he is from near Houston and an anonymous donor paid the more than $30,000 evacuation flight to bring him home.

The 36-year-old Swenson died in August in the hospital after a series of surgeries, medical procedures and blood transfusions, according to a Web site page created to help pay for his evacuation and medical treatment. Mrs. Merritt has a benefit Web page as well to accept donations to help with the medical costs. An adequate travel insurance policy would not have prevented the accidents both Swenson and Mrs. Merritt suffered, but it would have been one less preoccupation.

For people who travel frequently or will be living out of their home country for long periods a travel insurance policy may not be adequate. Most travel plans, such as those offered
La Cascada
A.M. Costa Rica/Shahrazad Encinias Vela
This popular waterfall at Montezuma also has been the scene of accidents befelling tourists.

through Squaremouth, are tailored for medical costs as a result of emergency situations.

Moreover, Sarah Byrne, marketing manager for the company said only residents of one country embarking on a trip to another country can qualify for the travel insurance. She said medical claims could be denied if it is discovered that a person is not actually traveling to Costa Rica and was living instead  as a perpetual tourist here prior to when he or she obtained the travel insurance.

This leaves many expats in Costa Rica in a strange limbo when it comes to health coverage. An expat must have legal residency before he or she can affiliate with the Caja Costarricense de Seguro Social and its medical services.

With luck, a tourist injured in an accident here might receive treatment at a Caja hospital. A perpetual tourist, one who lives in Costa Rica and renews a tourist visa every 90 days, probably could receive emergency Caja care, too, but regular medical expense would have to come out of the pocket.

U.S. Medicare does not assist outside of the United States, and expats from countries such as Canada with national policies are not covered in foreign places, said Carlos Perez from Global Insurance Net.

Perez works as an insurance broker providing worldwide coverage through one of the dozen or so companies specializing in global policies. He said he has many customers in Costa Rica. Some are retirees. Others are working as missionaries or own a tourism-type business and don't want to be caught off-guard in a coverage gap while traveling back and forth between different countries. He said the plans will provide for treatment in any country and can cover entire families and evacuation expenses.
There also are plans that specifically offer just evacuation insurance.

Hip-hop version of 'Canterbury Tales' is coming to Jacó
By the A.M. Costa Rica staff

It's not everyday that hip hop tells the tale of the oldest stories of English literature, but that is the case in the play “Canterbury Tales Remixed.”

The 90-minute play is fresh from New York and will kick off the world tour at Teatro Jacó from March 7 to 11. The show will begin at 7:30 p.m. every night.

“Canterbury Tales Remixed” is a two-man show. The actor and the DJ are the only two performers. Baba Brinkman wrote the play and stars in it. He has merged old English literature with modern language, and DJ Mr. Simmonds adds the hip-hop beats for an innovative fusion, said the director Darren Lee Cole.

The play includes three segments from “The Caterbury Tales by Chaucer and includes two earlier works: “Gilgamesh” and “Beowulf.”

“This play has been a big eye opener,” said Cole. “This makes
theater not stuffy. It makes it fun and cool. This isn't your typical grandma's theater.”

Cole has been in the industry for 35 years. He is owner of Teatro Jacó. And spends half his time in Costa Rica and the other half in New York as artistic director of the Soho Theater. He said in all his years of theater work he never thought that hip hop in a play wold come off so artistically.

Ticket prices begin at $25 for main seating. VIP tickets cost $35 and include two drinks. The play is in English. Those interested can visit the Web site at or call 2630-9812.

Teatro Jacó is offering “Do, Rey y Mi Disonante” Friday and Saturday at 7:30 p.m. This show is in Spanish.

Jo Stuart will return next week

Jo Stuart, A.M. Costa Rica's regular Friday columnist, is taking the day off. She will return next week.

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San José, Costa Rica, Friday, Feb. 24, 2012, Vol. 12, No. 40
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Black Widow suspect may be living in Costa Rica, FBI says
By the A.M. Costa Rica staff

There are plenty of sad tales of marriages gone wrong, but few are so dramatic as the one Mike Cross could tell if he still were alive.

He was a northern California businessman who fell in love while on a trip to Costa Rica. His Costa Rican bride, Nazira Maria Ugalde, joined him at his home in Plumas County, California, not far from Reno. He was an automobile dealer and the couple lived an upscale lifestyle until there was a surprising divorce.

Mrs. Cross returned to Costa Rica but returned to the States in July 2008. She had a plan, investigators alleged.

That plan was to do away with her former husband, according to the information law enforcement has gathered.

Mrs. Cross is unavailable for comment. The U.S. Federal Bureau of Investigation thinks she may be in Perú or back in Costa Rica. She would be reasonably safe here because Costa Rica does not allow its citizens to be extradited, even to face a murder charge.

U.S. fugitive Mrs. Cross
“After allegedly poisoning him, and while he was in a
near-death condition, Cross is thought to have driven him to Nevada,” said the FBI on the wanted poster. “After he died, Cross allegedly buried his body on his ranch in Lovelock, Nevada. She is also alleged to have then run over the grave site repeatedly with her car.”

There is a state warrant for her arrest on a murder allegation, and there is a federal warrant for flight, said the FBI.

Immigration agent one of two detained in probe of easy exits
By the A.M. Costa Rica staff

Judicial agents detained two men Thursday and said that they both conspired to let individuals who had been forbidden to leave the county to exit at Paso Canoas. One of the detained men is an immigration agent.

The arrests were the result of a sting operation, said the Poder Judicial.

Judicial agents said that the immigration agent was detained at the office on the border with Panama. The second person, identified as a gavilán or facilitator, was detained in Ciudad Neily, they said.

The Poder Judicial identified the immigration agent by the last names of Granados Méndez. Judicial investigators said he was 27. The second man was identified by the Poder Judicial by the last names of Calderón Navarro. He is 28, said the Judicial agents.

There are many reasons why a person would be forbidden by a judge from leaving the country. One reason is if the individual owes child support money, called pensión alimentaria, or
because a judge has imposed travel restrictions in advance of a criminal trial. These are called medidas cautelares.

The Poder Judicial said that after the arrests agents confiscated $300 that an undercover operator had paid to Calderón.

The Poder Judicial said that the facilitator would seek out persons who had been denied an exit stamp at the border post.  After obtaining money, the facilitator would ask that they rejoin the immigration line, investigators said. When the individual reached an agent, he would give a signal and the agent would know that the individual had made a payoff.

The men were in the cells of the Judicial Investigating Organization in San José Thursday night.

The case is being handled by a prosecutor in the office of  Probidad, Transparencia y Anticorrupción.

The southern border is the scene of illegal entries and exits. In addition to persons who are not supposed to leave the country, there are those who seek to enter who are the subjects of arrest warrants. Readers have said that wanted individuals cross from and to Panamá seemingly without trouble.

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A.M. Costa Rica's
Fifth news page
San José, Costa Rica, Friday, Feb. 24, 2012, Vol. 12, No. 40
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WikiLeaks figure Manning
arraigned in military court

By the A.M. Costa Rica wire services

The U.S. Army intelligence analyst accused of passing classified documents to WikiLeaks has been formally charged with 22 counts, the most serious of which is aiding the enemy.

Bradley Manning appeared at his arraignment at Fort Meade, near Baltimore, Maryland. A trial date has not been set.

Manning appeared at a preliminary hearing in December. Experts for the prosecution testified they found evidence Manning downloaded diplomatic cables onto compact discs that were sent to the anti-secrecy Web site WikiLeaks.

Manning's lawyers have described their client as a troubled man who should not have been allowed access to classified material while serving in Iraq between November 2009 and May 2010. His attorneys also said the military's oversight of its computers was lax.

Manning could spend the rest of his life in prison if found guilty.

The leaked diplomatic cables and military reports, published by WikiLeaks starting in July 2010, infuriated the international community, often providing blunt and unflattering U.S. views of world leaders' private and public lives.

U.S. officials say WikiLeaks publication of the stolen documents put lives in danger, threatened national security and undermined American efforts to work with other countries.

Chávez heading to Cuba
today for his surgery

By the A.M. Costa Rica wire services

Venezuela's president says he will continue leading the country, even as he travels to Cuba to undergo new surgery to remove a potentially cancerous lesion.

Hugo Chávez said he will travel today to Havana and expects to have the surgery early next week. Speaking during a nationally televised cabinet meeting, the Venezuelan leader said he would return "with more energy, more enthusiasm, more happiness."

Chávez, who is seeking re-election later this year, has not specified how long he will need to stay in Cuba for treatment.

"I'm leaving Monday. I'm sure I'll be in Cuba for a few days. We don't know exactly how many days, but it won't be long, I'm sure. I'm leaving. Catching up on things and leaving things in order, in the hands of Elias, in the hands of you the people. And, well, we'll be in touch every day,'' said Chávez.   Elias Jaua is the vice president.

The 57-year-old president announced Tuesday doctors in Cuba had detected a two-centimeter lesion in his pelvis, where a tumor was removed last year. But he denied rumors he was seriously ill, saying his body shows no signs the cancer has spread. He said doctors do not yet know if the new lesion is malignant.

Last year, Chávez had two operations and underwent chemotherapy in Caracas and Havana, though he has never specified exactly what kind of cancer he has. Since his treatments ended, the Venezuelan leader had been saying he was cancer free.

The president is seeking a third six-year term in October elections. He was first elected in 1998, and then won elections in 2000 and 2006.   Chávez is a vehement critic of the United States and an ally of Communist-ruled Cuba.

Google accepts button
to shield Internet users

By the A.M. Costa Rica wire services

A coalition of Internet companies, including U.S.-based Google, has agreed to support a do-not-track button being installed in Web browsers to help protect the privacy of computer users around the world.

For more than a year, the Internet browser companies had resisted embedding the button.  But slowly, various browsing companies have adopted the do-not-track feature, including Mozilla with its Firefox browser, Microsoft with Internet Explorer and Apple with its Mountain Lion operating system.

Thursday, Google, the world's most popular search engine, said it, too, would join a broad coalition of 400 technology, advertising and media companies to support the anti-tracking effort.  Google's announcement came hours before President Barack Obama called on Congress to pass legislation defining a privacy bill of rights for Internet users.

Obama said the privacy standards are necessary because he said "consumer trust is essential for the continued growth of the digital economy."

The U.S.-based Internet industry, fueled annually by nearly $40 billion in online advertising, has been caught in several privacy disputes as advanced technology has been created that can track users' viewing habits. Most disputes have involved claims that the browser companies have deceptively collected information about which Internet sites people have visited and then used it to customize advertising sent to users or for other commercial purposes.

Under the new agreement, the Internet companies have pledged within the next nine months to begin stopping customizing advertising or to use the data for employment, credit, health care or insurance purposes.  They still would be able to use tracking information for broader market research or product development purposes.

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Latin America news
U.S. engine maker establishes
link with Honduran firm

Special to A.M. Costa Rica

Cummins, Inc., and Grupo Laeisz announced Thursday a joint-venture partnership to distribute and service Cummins engines, generators, and parts in a region that includes Costa Rica, El Salvador and Honduras. The new joint venture, to be called Cummins Centroamérica, will be an 80-20 percent joint venture.

The joint venture announced today creates the foundation for both partners to significantly expand in the equipment market in Central America, where strong, steady growth is projected, said Cummins.

The agreement was signed in Honduras by Bernardo Hirsch, president of Grupo Laeisz, and representatives of Cummins.

Laeisz has been a Cummins distributor in Honduras for more than 40 years, with subsequent expansion into El Salvador and Costa Rica. The new joint venture will include both Cummins brands and products from Ingersoll Rand Air Solutions Group, which are considered complementary and non-competitive with Cummins lines. Laeisz will also continue to sell other brands that are non-competitive with Cummins or the joint venture under their existing business, though all facilities will bear the Cummins brand.

Cummins is headquartered in Columbus, Indiana, and employs approximately 44,000 people worldwide and serves customers in approximately 190 countries.

Private seaside service today
for Robert S. Nahrgang

By the A.M. Costa Rica staff

The ashes of Robert S. Nahrgang will be scattered in the ocean in a private ceremony today, said his wife, Maria de Pilar Rodríguez Ruiz.

Nahrgang, a U.S. expat, died Monday after a two-year battle with cancer. He lived in San Antonio de Escazú.

Nahrgang, 65, was born in Alabama. He was a boy from the ocean, he really liked the beach, said his wife of 43 years. He was a retired architect and worked for many years at a flower export business in Costa Rica. He was also a writer and a frequent commentator on the Costa Rican social scene via letters to A.M. Costa Rica.

Nahrgang spent the past couple of years playing tennis, said his wife. She said he was very athletic and was a tennis and a Central American skeet shooting champion.

The couple has two children, Robert Nahrgang and Erika Nahrgang Rodriguez. The son lives in the United States and will return on Saturday. The daughter is a well-known producer for a famous Costa Rican show.

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