Wednesday, November 28, 2012

AGREEMENT BETWEEN THE DEPARTMENT OF THE TREASURY OF THE UNITED STATES OF AMERICA AND THE MINISTRY OF FINANCE AND PUBLIC CREDIT OF THE UNITED MEXICAN STATES TO IMPROVE INTERNATIONAL TAX COMPLIANCE INCLUDING WITH RESPECT TO FATCA

See below for the full text of the agreement just entered between the USA and Mexico under the FATCA rules that sets forth the exchange of financial  and TAX information of US Citizens and taxpayers with accounts and financial interests in Mexico and Mexican Citizens with financial interests and accounts in the United States.

MEXICO - US FATCA AGREEMENT FOR EXCHANGE OF INFORMATION - TEXT OF AGREEMENT 

Sunday, November 25, 2012

When You are in Mexico, How can the IRS Find Out You have Not been Filing Your Tax Return?


We are often asked by expatriates living in Mexico  who have not filed their US tax returns for many years (and have seemed to have dropped of any IRS list)  how the IRS could ever find them or determine they are not filing their US tax return each year.  Here are just  some of the ways:

1.  Applying for social security benefits or pension benefits
2. Opening US bank and financial accounts
3. Inheriting money from their parents or others and failing to report income generated by those funds.
4. A Whistle blower. The IRS pays finders fees for those who turn in tax evaders whether the snitch is a US person or a foreign person.  The largest whistle blower fee paid to date  is $104 million.
5. Renew a passport (you now must give the Government your social secuirty number) which is then sent to the IRS.
6. From a foreign countries tax agency exchanging information with the IRS under treaties or  FATCA.
7. Form public domain information on the internet, websites, Linkedin, Facebook, Twitter, etc.
8. Registering the birth of a child born abroad with the US Embassy.
Which one is not filing their US Tax Return?
9. Marriages or divorces (that are public record) that reveal your existence.
10. By entering the US with a foreign passport that shows you were born in the USA
11. Stolen information from foreign banks and financial institutions given to the IRS
12. When your older children apply to US colleges or learning institutions and list information about their payments who long ago dropped out filing tax returns.
13. From other Americans in the US or abroad who do business with you
14. From suspicious activities forms filed with the IRS (yes this is an actual IRS form often filed by Banks or other financial institutions, car dealers, etc ).
15. As a result of information provided to it by the Serious Organised Crimes Office (SOCA) or   the US Treasury's Financial Crimes Enforcement Network.
16. From data provided the IRS by other taxpayers entering the Offshore Disclosure Program.
17. Forming a corporation or LLC in a foreign country that requires you register yourself as the owner your US  citizenship.


An ever increasing number of countries are agreeing with the IRS that the best way for all of them to collect more taxes is to share information about their residents.  Computers and the internet are making it easier to gather data and locate those who previously could successfully disappear into the world.  It is difficult to guess exactly when in the near future, but for sure within the next 5 to 10 years  there  will be no where to run and no where to hide.

We can help you solve your nonfiling problems before it is too late. We have been assisting Gringos in Mexico with their US taxes for over 22 years and know the best ways to re-enter the US tax system.  Email us at ddnelson@gmail.com 

Thursday, November 22, 2012

Mexico and US Sign Agreement to Exchange Banking and Financial Information Between Their Governments

On November 19, 2012, in Washington, the Mexican Undersecretary of Revenue, José Antonio González Anaya, and the United States Assistant Secretary for Tax Policy, Mark J. Mazur, signed a government-to-government agreement for the bilateral implementation of the Foreign Account Tax Compliance Act (FATCA).

FATCA was enacted by Congress in March 2010 and is intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers with foreign financial institutions (FFIs). Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.

Once this goes into effect do not expect to keep your activities in Mexico secret from the US Government or the IRS. Best to surface now with the IRS  before your secret Mexican business, financial and investment activities are discovered through this program when the IRS will not be lenient and will most likely impose both criminal and high civil penalties for failure to properly report.