Friday, December 7, 2012

Effective January 1, 2013 Mexican Will Exchange Gringo Financial Information with the US

The United States has entered into its second  bilateral exchange of financial and tax information agreements regarding the implementation of FATCA with  Mexico.  This new agreementd targets non-compliant U.S. taxpayers owning foreign accounts.The agreement will be  become  on January 1, 2013.
The reciprocal nature of the United States' agreement with  Mexico will allow the countries to use the automatic exchange of information to discover non-compliant taxpayers. The good old days of "what happens in Mexico, stays in Mexico" are almost gone. Because the Mexican Hacienda expects to use this agreement to collect taxes from Mexicans hiding their US financial activities in the US from the Mexican tax authorities, both Mexico and the US will benefit.
Now is the time to start reporting to the IRS all of your previously unreported Mexican business and financial activities before this new program is geared up.  If later the IRS discovers you have unreported income or assets in Mexico, and you have not been filing the proper reporting forms with your tax return, it most certainly will impose high monetary penalties and will most likely also seek criminal penalties. The average prison sentence for tax evasion usually runs 3-4 years.  
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