Are you a Resident Alien for tax purposes?

This is some information I found on the IRS website about the Resident Alien status for tax purposes. Depending on these requirements you may be subject US taxation as a resident, even if you are not a Resident Alien according US immigration status (e.g. holder of a US green card or an appropriate work visa).

IRS Information:

Resident Aliens

You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for calendar year 2008 (January 1–December 31). Even if you do not meet either of these tests, you may be able to choose to be treated as a U.S. resident for part of the year. See First-Year Choice under Dual-Status Aliens, later.

Green Card Test

You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2008. (However, see Dual-Status Aliens later.) This is known as the “green card” test. You are a lawful permanent resident of the United States at any time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) (or its predecessor organization) has issued you an alien registration card, also known as a “green card.” You continue to have resident status under this test unless the status is taken away from you or is administratively or judicially determined to have been abandoned.

Resident status taken away. Resident status is considered to have been taken away from you if the U.S. government issues you a final administrative or judicial order of exclusion or deportation. A final judicial order is an order that you may no longer appeal to a higher court of competent jurisdiction.

Resident status abandoned. An administrative or judicial determination of abandonment of resident status may be initiated by you, the USCIS, or a U.S. consular officer. If you initiate the determination, your resident status is considered to be abandoned when you file either of the following with the USCIS or U.S. consular officer.

• Your application for abandonment.

• Your Alien Registration Receipt Card attached to a letter stating your intent to abandon your resident status.

You must file the letter by certified mail, return receipt requested. You must keep a copy of the letter and proof that it was mailed and received. If the USCIS or U.S. consular officer initiates this determination, your resident status will be considered to be abandoned when the final administrative order of abandonment is issued. If you are granted an appeal to a federal court of competent jurisdiction, a final judicial order is required. Under U.S. immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. See Expatriation Tax in chapter 4.

Termination of residency after June 3, 2004, and before June 17, 2008. If you terminate your residency after June 3, 2004, and before June 17, 2008, you will still be considered a U.S. resident for tax purposes until you notify the Secretary of Homeland Security and file Form 8854, Expatriation Information Statement.

Termination of residency after June 16, 2008. For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4.

Substantial Presence Test

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2008. To meet this test, you must be physically present in the United States on at least:

1. 31 days during 2008, and

2. 183 days during the 3-year period that includes 2008, 2007, and 2006, counting:

   1. All the days you were present in 2008, and

   2. of the days you were present in 2007, and

   3. of the days you were present in 2006.

Banking from Non-Banks - Credit Unions

Everyone knows

• Bank of America,
• CitiBank,
• WellsFargo,
• Chase

or other major bank across the nation.

But there is another kind of bank, which does not call itself Bank but Credit Union.

Credit Unions were founded a long time ago, by companies, cities or other organizations to serve their own employees. Their services were initially limited to those employees or other special interest groups, but have nowadays opened themselves more and more to the general public.

Credit Unions, as not being the big banking giant, are your local bank around the corner. Usually their offers are better than those of the major banks.

More information soon at this place!

Secured Credit Cards vs. Prepaid Cards - What is the difference?

You may have heard about Secured Credit Cards and Prepaid Credit Cards.The concept of both cards seems quite similar, you pay a certain amount of money ahead of your purchases, and then use the cards. But why are there these different types of cards? Is there a difference? Yes there are. These are the details:

• Prepaid Debit Cards - Prepaid debit cards descended from secured credit cards that you are probably heard of. First of all, prepaid debit cards are just simple debit cards, that carry usually the Mastercard or Visa logo, and which are accepted worldwide. Similar to your regular debit card they deplete money in your account by your transactions. There are no monthly payments, as the money is already in the account as it is prepaid, and best of all there is no interest on these cards.
  
  The big difference is what is needed to qualify for such a card, and how much it cost to use it. Prepaid debit cards do not need to qualify for bank credit checks. Issuers usually do not verify employment, credit, or even the addresses and the legal residency. Therefore these cars are very popular among the population of illegal immigrants in the USA.
  
  The drawback of these cards are are much higher fees than traditional secured credit cards. This is the price people have pay for convenience and anonymity. These cards will not report cardholder transactions to the credit bureaus. Therefor you can not build credit with such a card!
  
  In the US is impossible to live without some type of Visa or Mastercard. Debit cards fill this void. They offer a simple "de facto" banking system for those unable to qualify normally. They offer direct deposits for paychecks and many other features to a segment of society that traditional banks have left out in the cold.
  

• Secured Credit Cards – are credit cards that are specifically designed for people with bad credit. Most people that apply for these types of credit cards do so to build or rebuild their credit. The other advantages are they appear, look and act exactly like a regular credit card. Most prepaid cards are clearly marked as debit cards.
  
  The price you pay for rebuilding your credit is interest. The bad thing is that you are paying interest on money you have! Unlike prepaid debit cards, secured cards usually carry pretty steep interest rate, usually around 20%. Secured credit cards are not usually "re-loadable". Meaning, once you make your initial deposit this becomes your "credit limit". Your payments will bring down the balance giving you more purchasing power.
  
  Secured credit cards report to the credit bureaus exactly the same way a regular credit card does. Creditors that review your credit for purchases have no idea if your credit card is secured or not. Another thing to watch is that most people will fund their cards with money that they intend to use immediately. Meaning they send in $500 and expect to be able to go out and spend that $500 immediately on receipt of their card. This is not good borrowing practices and will actually bring down your credit score.
  
  Credit cards are viewed as liabilities on your credit bureau once you borrow over half of your credit limit. The credit bureaus see this as a sign of credit dependency and discount your credit score 35%. When this happens you are hurting your credit, paying regular credit card fees, paying interest on your money and carrying around a maxed out credit card.
  
  Our advice to borrowers is to save up enough money so that your initial deposit is large enough to show a decent credit limit on your credit bureau, around $1000. Then leave it alone. It will only cost you the price of the annual fee to keep it in their bank. Most people feel the need to charge something on the card to "prove" they can pay it back. This assumption could not be further than the truth. Credit bureaus do not show monthly payments; they only show the months you have had the account open and any months that you have been delinquent.
  
  When a future creditor sees your $1000 open line of credit, higher credit scores and the financial restraint you have demonstrated you will be much more likely to get the loan. Secured credit cards can significantly help you rebuild your credit and have a positive impact on you overall credit score. Unfortunately most people use them incorrectly and end up hurting their credit more than it was before getting the card.

Wachovia Secured Credit Card

As a result of the changes in the financial markets, Wachovia was taken over by Wells Fargo Company of San Francisco. Secured credit cards for Wachovia are therefore offered by Wells Fargo.

Secured Visa Credit Card from USBank

This is another secured credit card, for persons that have a bad or not credit history.

It is a secured Visa Credit Card from USBank.

This card is available only in the one of the following states: AR, AZ, CA, CO, IA, ID, IL, IN, KS, KY, MN, MO, MT, ND, NE, NV, OH, OR, SD, TN, UT, WA, WI, WY.

Annual Percentage Rate for Purchases: 20.99% variable
Other Annual Percentage Rates1	Balance Transfers: 20.99% variable Cash Advances:20.99% variable Delinquency Rate: 28.99% variable
Variable Rate Information	Your annual percentage rate may vary monthly. The rate is determined by adding a margin to the Prime Rate. The margin used is as follows: Purchases and Balance Transfers: 16.99% Cash Advances: 16.99% Delinquency Rate: 23.99%
Grace Period	20 - 25 days for purchases only
Method of Computing the Balance for Purchases	Average Daily Balance Method (Including new purchases).
Annual Membership/Program Fee	$35.00
Minimum or Fixed Finance Charge	$2.00 minimum finance charge when interest is due, $0.00 closed Account management fee if you voluntarily close your Account with a balance.
Other Fees	Balance Transfer Fee:v3.00% of the transaction amount, $5.00 minimum Cash Advance Fee:v4.00% of the transaction amount, $10.00 minimum Cash Equivalent Fee:4.00% of the transaction amount, $20.00 minimum Late Payment Fee:vBalance up to $100.0: $19.00 Balance from $100.00 up to $250.0: $29.00 Balance of $250.00 or more: $39.00 Overlimit Fee : $39.00 Convenience Check Advance Fee: 3.00% of the transaction amount, $5.00 minimum Overdraft Protection Advance Fee: $10.00 per occurrence Foreign Transaction Fee: Less than or equal to 3% of the amount of your transaction in U.S. Dollars.

All interest rates are minimum interest. Information valid as of today and subject to any change anytime!!!

How to apply?

1. Complete an application.
2. Print and sign the U.S. Bank Secured Visa® Credit Card application.
3. Prepare a check for $300 to $5,000 made payable to U.S. Bank National Association. The check MUST BE a certified check, money order, or cashier's check.
4. Mail your application along with your check to :

U.S. Bank National Association ND
P.O. Box 6363
Fargo, ND 58125-6363

Good luck!

Individual Taxpayer Identification Number (ITIN): Some facts about it and how to apply for one

What is an ITIN?

• An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. It is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX.
• IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).
• ITINs are issued regardless of immigration status because both resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code.
• Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.

What is an ITIN used for?

• ITINs are for federal tax reporting only, and are not intended to serve any other purpose. An ITIN does not authorize work in the U.S. or provide eligibility for Social Security benefits or the Earned Income Tax Credit. ITINs are not valid identification outside the tax system.
• IRS issues ITINs to help individuals comply with the U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers.

Who needs an ITIN?

• IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for a SSN, who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty, needs an ITIN.
• Examples of individuals who need ITINs include:

1. Non-resident alien filing a U.S. tax return and not eligible for a SSN
2. U.S. resident alien (based on days present in the United States) filing a U.S. tax return and not eligible for a SSN
3. Dependent or spouse of a U.S. citizen/resident alien
4. Dependent or spouse of a non-resident alien visa holder

Are ITINs valid for identification?

• No. ITINs are not valid identification outside the tax system. Since ITINs are strictly for tax processing, IRS does not apply the same standards as agencies that provide genuine identity certification.
• ITIN applicants are not required to apply in person, and IRS does not further validate the authenticity of identity documents. ITINs do not prove identity outside the Federal tax system, and should not be offered or accepted as identification for non-tax purposes.

Are ITINs valid for work purposes?

• No. ITINs are for federal income tax purposes only. Getting an ITIN does not change your immigration status or your right to work in the United States.

REVISED APPLICATION STANDARDS FOR ITINS

What are the revised application standards for ITINs?
Effective immediately, each ITIN applicant must now:

• Apply using the revised Form W-7
  
• Attach a federal income tax return (Form 1040NR) to the Form W-7. Any applicants who meet an exception to the requirement to file a tax return (see the instructions for Form W-7) must provide documentation to support the exception.

Why is IRS revising the ITIN application process?

• The revisions to the ITIN application process will help ensure ITINs are used for their intended tax administration purposes.

What documents are acceptable as proof of identity and foreign status?

• IRS has streamlined the number of documents the agency will accept as proof of identity to obtain an ITIN. There are now 13 acceptable documents.

• An original, or a certified or notarized copy, of an UNEXPIRED passport is the only document that is accepted for both identity and foreign status. If you do not have a passport, you must provide a combination of current documents that contain expiration dates - we accept documents issued within 12 months of the application if no expiration date is normally available. The documents must also show your name and photograph, and support your claim of foreign status.

• IRS will accept certified or notarized copies of a combination (two or more) of the following documents, in lieu of a passport:

1. National identification card (must show photo, name, current address, date of birth, and expiration date)
2. U.S. driver's license
3. Civil birth certificate (required for dependents under 18 years old)
4. Foreign driver's license
5. U.S. state identification card
6. Foreign voter's registration card
7. U.S. military identification card
8. Foreign military identification card
9. Visa
10. U.S. Citizenship and Immigration Services (USCIS) photo identification
11. Medical records (dependents - under 14 years old only)
12. School records (dependents and/or students - under 18 years old - only)

HELP AND INFORMATION

How do I apply for an ITIN?

• Use the latest revision of Form W-7, Application for IRS Individual Taxpayer Identification Number to apply. Attach a valid federal income tax return unless you qualify for an exception, and include your original or certified proof of identity documents. Because you are filing your tax return as an attachment to your ITIN application, you should not mail your return to the address listed in the Form 1040, 1040A or 1040EZ instructions. Instead, send your return, Form W-7 and proof of identity documents to:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

• You may also apply using the services of an IRS-authorized Acceptance or visit an IRS Taxpayer Assistance Center in lieu of mailing your information to the IRS in Austin. TACs in the United States provide in-person help with ITIN applications on a walk-in or appointment basis. Applicants outside the United States should contact an overseas IRS office to find out if that office accepts Form W-7 applications. The IRS's ITIN Unit in Austin issues all numbers by mail.

When should I apply for an ITIN?

• You should complete Form W-7 as soon as you are ready to file your federal income tax return, since you need to attach the return to your application.
• If you meet one of the exceptions and do not need to file a return, submit Form W-7, along with the documents required to meet your purpose for needing an ITIN, as soon as possible after you determine that you are covered by that exception.
• You can apply for an ITIN any time during the year; however, if the tax return you attach to Form W-7 is filed after the return's due date, you may owe interest and/or penalties. You should file your current year return by the April 15 deadline to avoid this.

How and when can I expect to receive my ITIN?

• If you qualify for an ITIN and your application is complete, you will receive a letter from the IRS assigning your tax identification number, usually within four to six weeks. The IRS has changed from an ITIN card to an authorization letter to avoid any possible similarities with a Social Security Number card. Current ITIN holders' cards will not be replaced; they should continue to use the numbers previously issued when they need to supply identifying numbers for tax purposes.
• If you have not received your ITIN or other correspondence six weeks after applying, you may call the IRS to find out the status of your application.

Where can I get help with my ITIN application?

• You may call the IRS toll-free at 1-800-829-1040 for information and help in completing your Form W-7 and your tax return, or to check on the status of your application six weeks after submitting Form W-7.

• Assistance is also available by appointment at IRS Taxpayer Assistance Centers (TACs) in the United States to provide in-person help with ITIN applications on a walk-in or appointment basis. Applicants outside the United States may contact an overseas IRS office to find out if that office accepts Form W-7 applications.

• You may also use the services of an IRS-authorized Acceptance Agent.

What is an Acceptance Agent?

• An Acceptance Agent is an individual, business or organization (college, financial institution, accounting firm, etc.) authorized by IRS to assist individuals in obtaining ITINs. Certifying Acceptance Agents review applicants' documentation, complete a certificate of accuracy, and forward the certificate and application to the IRS for processing. Some Acceptance Agents may charge a fee.

Information up to this point is provided by the US Internal Revenue Service.


The best at last:
Are there any fees associated with the ITIN imposed by the IRS?

• No! The ITIN is issued as part of a regular tax filing. There is no special fee imposed by the IRS to the taxpayer.
• Therefore no one should consider any websites offering IRS forms (e.g. W-7) at absurdly high prices of up to $50! Just be aware, that such forms can be easily downloaded from the IRS website.

Real Experience with the ITIN Application Process

The application process is not that complicated, but the rules must be fulfilled by the requestor. Trying to get around this, should not be considered and may eventually have serious consequences when dealing with the IRS.

• ID checking is strict - no discussion possible!
  

After the initial years of the ITIN processing, which came with rather not so perfect ID checking, IRS has not increased the diligence of its ID document checking. Document requirements must be met! IRS processes mainly two types of applications.

1. A large number of applications are from illegal aliens present in the USA. Those applicants usually use the services of local acceptance agents, who do the checking.
2. Other applications, who are not from illegal aliens in the USA, rely on the direct processing of the IRS, with their ID document checking procedures. As you belong to this group of people, be aware that you will be screened much more as you may not use any local acceptance agent.
   

• present information orderly and clean

In the course of the application it is highly adviable to present all documents in "good shape". Forms should be filled out readable and properly. IRS staff is willing to do a good job, therefore help the IRS person who will process your application! Otherwise longer processing times will happen, and you will have to send a lot of additional mails to them. If possible do not use any handwriting, as this may not be understood at all times. Rather print information with your computer, use the PDF forms that can be filled electronicly and nicely printed.

• be friendly to IRS people, because they are also very friendly to you

Experience shows that most IRS staff is nice and friendly. Some may be a little grumpy, but they know that any new ITIN application may eventually get them additional tax revenues. If you deal with IRS staff on the phone, do no tbe surprised, but they are much more friendly than what your experience is from a local cable company or maybe an airline. Friendliness pays and will expedite the processing of your application! In your letters to IRS you may also give a little person touch by adding "Thank You", this time handwritten, at the end of your letters. It will create a much nicer personal atmosphere that will be highly beneficial for your wish. These simple but efficient rules also apply to other agencies and sometimes even private companies ... :-)

Wamu (Chase) Online Savings Account with ITIN (Individual Taxpayer Identificatoin Number)?

Wamu Statement Savings Account

Wamu currently offers an almost 0% interest statement savings account, which can be opened at one of the Wamu branches. "Almost 0%" means here 0.01% per year, not per day, not per month. Ouch!

Investing $1.000 in such an account would give you the exceptionally high amount of around 10 cents or $0.10! Not a really an attractive investment, even today.

Wamu Online Savings Account

The Online version of the Wamu Savings Account offer you around 75 times the interest of the Wamu Savings Account, which means 0.75% per year.

Therefore such an account would be a much better, as an investment of $1.000 would give you at least $ 7.50 per year.

Catch: Online Application

The only problem is that the Wamu Online Savings Account can only be opened online providing a SSN and a US identification document number and validity date. There is no alternative option to get this account!

Therefore it is virtually impossible to get this account as an NRA (non resident alien) or a US person without a SSN.

News:
Wamu now mentions now on its website, that it also accepts a "taxpayer ID number".

Taxpayer ID could mean SSN, ITIN or EIN. But there is no clarification given.

The Wamu help pages do not provide any information either, if "taxpayer ID number" is entered. Therefore it is not clearly stated, if an ITIN (Individual Taxpayer Identification Number) could be used. But give it a try!

Secured Credit Card from Citibank

Citibank also offers a secured credit card, but has some requirements which may be more complicated to fulfill for NRA (Non Resident Alien).



These are the features of the card (as found in document SecuredCard_pdf_App_ENG.pdf)

• Annual Percentage Rate (APR) for purchases: 13.24% variable
• Other APRs Cash advance APR: 19.99% variable. Default APR: 28.99% variable.
• Annual Fee Annual Membership Fee: $29.
  

These are the document requirements:

Identification

A copy of the mentioned documents is required, not the real document!

US Citizens or Resident Alien (including Green Card holder)

• US Driver's License State-Issued
• Non-Driver's ID
• Passport (US or Non-US)
  
• Mexican Consular ID

Non-US Persons

• Passport (Non-US)
  
• Mexican Consular ID

Address Verification

• U.S. Driver’s License/DMV Non-Driver’s I.D. (U.S. Driver’s License/DMV Non-Driver’s I.D. is not accepted as proof of address for Non-U.S. persons.)
  
• Utility bill within last 60 days
• Phone bill (no cell phone) within last 60 days
• Checking or Savings Statement within the last 60 days
• Citibank® Checking or Savings Statement that is more than 90 days old
  

Terms and Conditions of Offer (from document SecuredCard_pdf_App_ENG.pdf)

• Backup Withholding Tax—U.S. tax rules require Citibank to withhold a tax at 28% on income if a taxpayer identification number has not been provided. Therefore, if you do not provide us with your SSN or ITIN, we will be required to withhold 28% of the interest income earned on your Certificate of Deposit. This backup withholding tax is required to be remitted to the IRS. You will be able to claim this backup withholding tax as a credit on your U.S. Income Tax Return.
• You must be at least 18 years of age. If you are married, you may apply for a separate account Citibank (South Dakota) N.A. (“we” or “us”) is the issuer of your account.
• Federal law requires us to obtain, verify and record information that identifies each person who opens an account, in order to help the government fight the funding of terrorism and money-laundering activities. To process the invitation form, we must have your name, street address, date of birth and other identifying information, and we may ask for identifying documents from you as well.
• To process the application for a new account, it must be: 1. Accurately completed, and 2. Signed and verifiably correct.
• Please send the application to:
  CITI New Cardmember Services
  P.O. Box 6264
  Sioux Falls, SD 57117-9637
• Please allow four weeks from date of mailing to process a completed application.
• We may gather information about you, including from your bank, credit bureaus and others, to verify your identity and determine your eligibility for credit, renewal of credit, and future extensions of credit. If you ask us, we will tell you whether or not we requested a credit bureau report and the names and addresses of any credit bureaus that provided us with such reports.
• To receive a Citi® Secured MasterCard®, you must meet our applicable criteria bearing on credit worthiness. Please note that cash advances may be limited to a portion of your credit line.
• If you are approved for credit, you will receive a cardmember agreement (“Card Agreement”) with your card. The Card Agreement will be binding on you unless you cancel your account within 30 days after receiving your card and you have not used or authorized use of your account.
• Do not forward annual fee payment with this Acceptance Form. If approved, you will be billed at a later time.
  
  

Details about Secured Credit Cards: Bank of America and Wells Fargo

Here are some details about secured credit cards from major banks:

Bank of America

Annual fee (as of today) $29 APR (as of today) 14.24%
Fee on Balance Transfers (as of today) 4%, Min per transaction $10
ITIN (Individual Taxpayer Identification Number) accepted online and on paper form.

Wells Fargo

Annual fee (as of today) $18 APR (as of today) 18.99%
ITIN (Individual Taxpayer Identification Number) not mentioned, maybe it will be accepted anyway.
Existing account at Wells Fargo required for online Application.
Eligibility statement: "You must be at least 18 years old, not have declared bankruptcy within the past 12 months, and not have any unsettled liens."

Cards from other banks may provide similar features and should also be considered for your purpose. Both banks mentioned here, provide branch services in major areas of the US, which makes applying much easier than going through an online application process.

Identification Requirements as defined by the Department of the Treasury

This is the Department of Treasury requirments imposed on banks to identify customers.

The document is very long, but I have found the following information, which may be useful:

For non-U.S. persons a bank must obtain one or more of the following: a taxpayer identification number; passport number and country of issuance; alien identification card number; or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard. The basic information that banks would be required to obtain under this proposed regulation reflects the type of information that financial institutions currently obtain in the account-opening process and is similar to the identifying information currently required for each deposit or share account opened (see 31 CFR 103.34(a)(1)).

This information has been extracted from the document, which is specified as follows:

[Billing Code: 4810-02]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 21
[Docket No. 02-11]
FEDERAL RESERVE SYSTEM
12 CFR Part 208
12 CFR Part 211
[Docket No. R-1127]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 326
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[No. 2002-27]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 748
DEPARTMENT OF THE TREASURY
31 CFR Part 103
RIN 1506-AA31

Customer Identification Programs for Banks, Savings Associations, and Credit Unions
AGENCIES: The Financial Crimes Enforcement Network, Treasury; Office of the Comptroller
of the Currency, Treasury; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; Office of Thrift Supervision, Treasury; National Credit Union Administration.

ACTION: Joint notice of proposed rulemaking.

SUMMARY: The Department of the Treasury, through the Financial Crimes Enforcement Network (FinCEN), together with the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS), and the National Credit Union Administration (NCUA) (collectively, the Agencies) are jointly issuing a proposed regulation to implement section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001(the Act). Section 326 requires the Secretary of the Treasury (Secretary) to jointly prescribe with each of
the Agencies, the Securities and Exchange Commission (SEC), and the Commodity Futures
Trading Commission (CFTC), a regulation that, at a minimum, requires financial institutions to
implement reasonable procedures to verify the identity of any person seeking to open an account, to the extent reasonable and practicable; maintain records of the information used to verify the person's identity; and determine whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency. The proposed regulation applies to banks, savings associations, and credit unions.

DATES: Written comments on the proposed rule may be submitted on or before [INSERT
DATE 45 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].
ADDRESSES: Because paper mail in the Washington area may be subject to delay,
commenters are encouraged to e-mail or fax comments. Comments should be sent by one method only. Financial institution commenters are encouraged to submit comments only to their Federal functional regulator. Non-financial institution commenters are encouraged to submit comments only to FinCEN. All comments will be considered by Treasury and the Agencies in formulating the final rule.

OCC: Please direct your comments to: Office of the Comptroller of the Currency, 250 E Street, SW., Public Information Room, Mailstop 1-5, Washington, DC 20219, Attention; Docket No. 02-11; FAX number (202) 874-4448; or Internet address: regs.comments@occ.treas.gov. Comments may be inspected and photocopied at the OCC's Public Reference Room, 250 E Street, SW., Washington, DC. You can make an appointment to inspect comments by calling
(202) 874-5043. Board: Comments should refer to Docket No. R-1127 and may be mailed to Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW, Washington, DC 20551; sent by FAX to (202) 452-3819 or (202) 452-3102; or sent by e-mail to regs.comments@federalreserve.gov. Members of the public may inspect comments in Room MP-500 between 9:00 a.m. and 5:00 p.m. on weekdays pursuant to section 261.12 (except as provided in section 261.14) of the Board's Rules Regarding Availability of Information, 12 CFR 261.12 and 261.14.
FDIC: Comments should be directed to: Executive Secretary, Attention: Comments/OES, Federal Deposit Insurance Corporation, 550 17th Street, N.W., Washington, DC 20429. Comments may be hand-delivered to the guard station at the rear of the 550 17th Street Building (located on F Street), on business days between 7 a.m. and 5 p.m. In addition, comments may be sent by fax to (202) 898-3838, or by electronic mail to comments@FDIC.gov.
Comments may be inspected and photocopied in the FDIC Public Information Center, Room
100, 801 17th Street, NW, Washington, D.C., between 9 a.m. and 4:30 p.m., on business days.
OTS: Comments may be mailed to Regulation Comments, Chief Counsel’s Office, Office of Thrift Supervision, 1700 G Street, NW, Washington, DC 20552, Attention: No. 2002-
27; FAX number (202) 906-6518, Attention: No. 2002-27; or Internet address regs.comments@ots.treas.gov, Attention: No. 2002-27 and include your name and telephone number. Comments may also be hand delivered to the Guard’s Desk, East Lobby Entrance, 1700 G Street, NW., from 9:00 a.m. to 4:00 p.m. on business days, Attention: Regulation Comments, Chief Counsel’s Office, No. 2002-27. OTS will post comments and the related index on the OTS Internet Site at www.ots.treas.gov. In addition, you may inspect comments at the Public Reading Room, 1700 G St. NW, by appointment. To make an appointment for access, you may call (202) 906-5922, send an e-mail to public.info@ots.treas.gov, or send a facsimile transmission to (202) 906-7755. (Please identify the materials you would like to inspect to assist us in serving you.) We schedule appointments on business days between 10:00 a.m. and 4:00 p.m. In most cases, appointments will be available the business day after the date we receive a request.
NCUA: Direct comments to the Secretary of the Board. Mail or hand-deliver comments
to: National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428.
You may fax comments to (703) 518-6319, or e-mail comments to regcomments@NCUA.gov.
To inspect comments, please contact the Office of General Counsel, (703) 518-6540; or the
Office of Examination and Insurance, (703) 518-6360. FinCEN: Comments may be mailed to FinCEN, Section 326 Bank Rule Comments, P.O. Box 39, Vienna, VA 22183, or sent to Internet address regcomments@fincen.treas.gov with the caption “Attention: Section 326 Bank Rule Comments” in the body of the text. Comments may be inspected at FinCEN between 10 a.m. and 4 p.m. in the FinCEN Reading Room in Washington, D.C. Persons wishing to inspect the comments submitted must request an appointment by telephoning (202) 354-6400 (not a toll-free number).
FOR FURTHER INFORMATION CONTACT:
OCC: Office of the Chief Counsel (202) 874-3295.
Board: Enforcement and Special Investigations Sections: (202) 452-5235; (202) 728-
5829; or (202) 452-2961.
FDIC: Special Activities Section, Division of Supervision, and Legal Division at
(202) 898-3671.
OTS: Office of the Chief Counsel, (202) 906-6012.
NCUA: Office of General Counsel, (703) 518-6540; or Office of Examination and
Insurance, (703) 518-6360.
Treasury: Office of the Chief Counsel (FinCEN), (703) 905-3590; Office of the
Assistant General Counsel for Enforcement (Treasury), (202) 622-1927; or the Office of the
Assistant General Counsel for Banking & Finance (Treasury), (202) 622-0480.

Legal Requirements: Sec. 326 of the PATRIOT ACT

As stated before, requirements about identification are defined within the PARTIOT ACT (H.R. 3162).

The PATRIOT Act sets a framework for identification requirements imposed on banks. The PARTRIOT Act does not impose individual requirements.

Individual requirements are to be implemented by appropriate rule making of the Department of Treasury.

SEC. 326. VERIFICATION OF IDENTIFICATION.

(a) IN GENERAL- Section 5318 of title 31, United States Code, as amended by this title, is amended by adding at the end the following:

`(l) IDENTIFICATION AND VERIFICATION OF ACCOUNTHOLDERS-

`(1) IN GENERAL- Subject to the requirements of this subsection, the Secretary of the Treasury shall prescribe regulations setting forth the minimum standards for financial institutions and their customers regarding the identity of the customer that shall apply in connection with the opening of an account at a financial institution.

`(2) MINIMUM REQUIREMENTS- The regulations shall, at a minimum, require financial institutions to implement, and customers (after being given adequate notice) to comply with, reasonable procedures for--

`(A) verifying the identity of any person seeking to open an account to the extent reasonable and practicable;

`(B) maintaining records of the information used to verify a person's identity, including name, address, and other identifying information; and

`(C) consulting lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency to determine whether a person seeking to open an account appears on any such list.

`(3) FACTORS TO BE CONSIDERED- In prescribing regulations under this subsection, the Secretary shall take into consideration the various types of accounts maintained by various types of financial institutions, the various methods of opening accounts, and the various types of identifying information available.

`(4) CERTAIN FINANCIAL INSTITUTIONS- In the case of any financial institution the business of which is engaging in financial activities described in section 4(k) of the Bank Holding Company Act of 1956 (including financial activities subject to the jurisdiction of the Commodity Futures Trading Commission), the regulations prescribed by the Secretary under paragraph (1) shall be prescribed jointly with each Federal functional regulator (as defined in section 509 of the Gramm-Leach-Bliley Act, including the Commodity Futures Trading Commission) appropriate for such financial institution.

`(5) EXEMPTIONS- The Secretary (and, in the case of any financial institution described in paragraph (4), any Federal agency described in such paragraph) may, by regulation or order, exempt any financial institution or type of account from the requirements of any regulation prescribed under this subsection in accordance with such standards and procedures as the Secretary may prescribe.

`(6) EFFECTIVE DATE- Final regulations prescribed under this subsection shall take effect before the end of the 1-year period beginning on the date of enactment of the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001.'.

(b) STUDY AND REPORT REQUIRED- Within 6 months after the date of enactment of this Act, the Secretary, in consultation with the Federal functional regulators (as defined in section 509 of the Gramm-Leach-Bliley Act) and other appropriate Government agencies, shall submit a report to the Congress containing recommendations for--

(1) determining the most timely and effective way to require foreign nationals to provide domestic financial institutions and agencies with appropriate and accurate information, comparable to that which is required of United States nationals, concerning the identity, address, and other related information about such foreign nationals necessary to enable such institutions and agencies to comply with the requirements of this section;

(2) requiring foreign nationals to apply for and obtain, before opening an account with a domestic financial institution, an identification number which would function similarly to a Social Security number or tax identification number; and

(3) establishing a system for domestic financial institutions and agencies to review information maintained by relevant Government agencies for purposes of verifying the identities of foreign nationals seeking to open accounts at those institutions and agencies.

Secured Credit Cards

Secured credit cards offer credit to persons with poor or even no credit.

• Poor credit means that a person has had some negative issues in it's credit history. Most likely payments were no made in full or not made at all, or that a person may have even filed bankruptcy to clear all credit obligations.
• No credit means that a person has absolutely no credit relevant information at any of the existing credit bureaus. Therefore a bank may not easily evaluate the credit offer a person, as no information is available.

A secured credit card is a type of credit card, which is secured by a deposit account (e.g. special savings account) by the cardholder. The cardholder deposits between 100% and 200% of the total amount of the desired credit amount.

If a cardholder deposits $2000, he may get a line of credit between $1000 and $2000.

If such an deposit is put into a special account of the bank, even lower deposits may be required.

There is no difference in the payment of secured credit cards vs. non-secured cards. The security is not meant to be used a regular payment of purchases made on the card, but rather a backup, if the cardholder defaults. Therefore the overall risk for the bank is nearly nonexistent.

The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows for building of positive credit history.

Secured credit cards are available with both Visa and MasterCard logos.

Offers of secured credit cards by major banks:

• Bank of America
  
• Wells Fargo
  

Available Cards in the US Banking System

The US banking system has different kind of cards, which may not be available in all countries.

These are:

• Credit Cards offer a line of credit at a certain interest rate called APR (Annual Percentage Rate). The APR is usually rather hight in the more than 10% rate. Some banks may even charge more than 20%. Besides this fee, banks may also charge annual fees for the card, and certain fees for late payment or even over the limit fees. A minimum amount must be paid back every month. Smart customer's usuallu do not need any credit at all, but like all the existing other features of US credit cards. :-)
  
• Charge Cards offer card payments, which will be charged once a month as an aggregate from an existing checking account. Usually there is no way to get any credit on these kind of cards. The debt must be paid in full any month.
  
• Debit Cards offer the least functionalities among all kind of cards. Payments with these cards will be directly debited to an existing checking account.

Starting Online Banking

Most banks require you to enter a SSN or another TIN to enable their online services. This makes it almost impossible for persons that have no SSN or ITIN to use online banking.

As a remedy of this problem, it is usually also possible to enable online banking by calling designated phone numbers. There you will be asked personal information, that is on the bank's record to identify yourself and have the online banking enabled this way.

It should be obvious that online banking may also be enabled while opening the bank account at your branch. But most astonishingly not all banks offer this.

Opening an account online?

Today the Internet is the way to do business. This applies especially to the US, as they have invented the Internet.

It is possible to open a bank account, credit card, loan, or other financial services online. Identification by the customer is mainly provided by presenting a SSN along with a state ID number, which is most usually a state driver's license.

Being a NRA (Non Resident Alien) means that you usually do not have either one. Therefore opening a bank account online will not work. You need to find a local branch of your desired bank an apply there in person.

Sorry for this very inconvenient fact. :-)

Available banking options

The following banking options are available:

• Checking Accounts offers you to deposit, withdraw, transfer and receive money. Usually those accounts to not provide any interest.
  
• Savings Accounts offers a usually low interest investment option. Most savings account have a $300 minimum to avoid any monthly fees, which would be in the range of $5. Access to the deposits may be limited by amount or a certain number of transactions per month, week.
  
• Certificate of Deposit are time investment accounts. Usually a minim amount higher than $1000 is required. The invested money will earn interest for a predefined period of time. Access to the invested money may not be possible before the maturity day. CDs are usually used as midterm investments for money, which is not immediately needed. Banks may offer premature access to funds at a fee.
  
• Debit Cards offer basically to withdraw and deposit money to any kind of account. One Card may be used to access all accounts. The ATM (Automatic Teller Machine) will ask for every transaction, which account should be used. Debit Cards may be at the same time also Credit Cards. For POS (Point of Sale) transactions the clerk will usually ask "debit or credit"? Depending on this answer a signature or a PIN (Personal Identification Number) may be needed. Debit Cards are usually issued by Visa or MasterCard.
• Online Banking offers online access to the bank account from the Interner. All or a limited number of transactions may be performed online rather than visiting a local branch. Online Banking may be an essential feature if you are not present in the US.
  

What is required by law and what not?

The legal requirements are very obvious, agreeable and certainly not to high.

The US government requires from the banks to ask customers for proper identification. It is just that simple and nothing magic.

So what is NOT needed?

• You do not need a SSN (Social Security Number). SSNs are assigned by the SSA (Social Security Administration) with it's originally defined purpose to assign a social security account numbers for pensions and other benefits paid by the SSA. The SSN is also used as a TIN (Taxpayer Identification Number) by the IRS for individuals.
• You do not need any other TIN (e.g. ITIN, EIN). ITINs (Individual Taxpayer Identification Numbers) are assigned by the IRS for persons not eligible to get a SSN. As a matter of fact ITINs are widely used by illegal immigrants to file their taxes. But they do not provide any benefits for improving their illegal immigration status in the US. But there are also legitimate and non-illegal persons, that have ITINs!!! EINs (Employer Identication Number) are TINs assigned to self-employed persons, companies, corporations, foundations, and other legal entities.
• You do not need any US ID document (e.g. US passport, US state driver license, US green card, ...)
• You do not need a special visa. Being a regular VWP (Visa Waiver Programme) visitor or a B1/B2 or any student related visa is fully sufficient.
  

So what is actually needed?

For identification purposes:

• At least one government issued ID. Non government issued IDs will not work! Most preferable is this a valid passport. Considering you are legally in the US, the passport should also have a valid I-94 (white paper form) or I-94W (green paper form) form attached to it. This form shows the bank your legal status in the US and should be convincing to them.
  
• A second form of ID may be required, which could be a national identity card or a national drivers license.

For tax purposes:

• If you may not provide the bank with a SSN or other TIN, the bank will ask you to fill out a W-8BEN form. This IRS form tells the bank that the account's beneficiary is a NRA (Non Resident Alien). If you will not be asked for this form, then your interest will be taxed and the withheld taxes will be sent to the IRS. You may reclaim any unjustified taxes by filing a tax return. Filing may be very complicated, as you will also need to apply for an ITIN.
  

Open an Account: What do you need? A bank willing to open an account!

You may find different information on the web about the requirements to open a bank account.

First of all, you need a bank, which is willing to give you an account. To provide banking services to non US citizens, non residents is not a right you may ask from a bank, but is a privilege given to you from that bank. So whatever the bank asks from you counts. Discussing about this with the bank may not be useful.

You may look for a larger bank, e.g.

• Bank of America
• JP Morgan Chase
• Wells Fargo
• Citibank

to open an account.

Some smaller and specialized banks and credit unions may also provide banking services to you, but it may be harder to get.

What is the stepping stone to get a bank account?

As as result of sloppy bank procedures before the 9/11 terror attacks, which enabled terrorist to use banking services as part of their terrorist activities, requirements have been tightened mainly by the so called PATRIOT ACT.

Besides this most banks fear legal ramifications from law enforcement and regulatory authorities, and may have their own understanding of these requirements. So banks may have even higher requirements than what is actually required by law.

Bank Account in the USA: What for?

To have a bank account in the USA can be useful for many matters, even if you are just a regular visitor to the USA.

• You may benefit from the same payment systems, that US citizens or other residents enjoy. No special handling, because you may not have a non US bank card.
  
• You may receive money by ordinary bank transfers. No Paypal charges!
• You may send money by ordinary bank transfers. No Paypal charges!
• You may keep US funds, which you may have bought at a good rate, in the USA and use it for business or private matters.
• You may earn interest on savings accounts or CDs (certificates of deposit).