I just found out that having a mexican bank account that had over $10,000 USD equivalent for even one day necessitates the filing of IRS form TDF
90-22.1
The filing instructions and form are at www.irs.gob.
I was also told that in 2004 the US government enacted a $10,000 penalty for failure to file
From the IRS website:
If you own a foreign bank account, brokerage account, mutual fund, unit trust, or other financial account, then you may be required to report the
account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial
Accounts (FBAR), if
The person has financial interest in, signature authority or other authority over one or more accounts in a foreign country, and
The value of the account exceeds $10,000 at any time during the calendar year.
A United States person is not prohibited from owning foreign accounts. The FBAR is required because foreign financial institutions may not be subject
to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who
may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit
purposes or to identify unreported income maintained or generated abroad.
Definition of Terms
A “United States person” is:
A citizen or resident of the United States,
A domestic partnership,
A domestic corporation, or
A domestic estate or trust
A foreign country includes all geographical areas outside the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana
Islands, and the territories and possessions of the United States (including Guam, American Samoa, and the United States Virgin Islands).
Reporting and Filing Information
A person who holds a foreign account may have a reporting obligation even though the account produces no taxable income. Checking the appropriate
block on Form 1040 Schedule B, and filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, satisfies the account holder’s reporting
obligation.
A foreign account holder must mail the Form TD F 90-22.1 on or before June 30 of the following year to:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621.
The FBAR is not to be filed with the filer’s Federal income tax return.
The granting, by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR. There is no extension
available for filing the FBAR.
Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.
Exceptions to the Reporting Requirement
There are exceptions to the reporting requirement. These exceptions include:
Accounts in U.S. military banking facilities operated by a United States financial institution to serve U.S. Government installations abroad are not
considered to be accounts in a foreign country for purposes of the reporting requirement.
An officer or employee of a bank that is subject to the supervision of the Comptroller of the Currency, the Board of Governors of the Federal Reserve
System, the Office of Thrift Supervision, or the Federal Deposit Insurance Corporation, is not required to report having signature or other authority
over a foreign account if the officer or employee has no personal interest in the account.
An officer or employee of a domestic corporation whose equity securities are listed on a national securities exchange or which has assets exceeding
$10 million and 500 or more shareholders of record, is not required to report having signature or other authority over a foreign account if the person
has no personal financial interest in the account, and the officer or employee has been advised in writing by the chief financial officer of the
corporation that the corporation has filed a current report that includes the foreign account.Bruce R Leech - 3-6-2007 at 09:38 PM
this is very old news. do a search and you will see that this has been hashed over so many times it is burned in to my brain. you cant hide your money
in Mexico, that is what the Swiss are forosoflojo - 3-7-2007 at 05:51 AM
Cant hide it in Switzerland anymore or about 200 other countries that signed the agreement.villadelfin - 3-7-2007 at 08:32 AM
sorry to have bored you Bruce. I tried search but must have missed
the keywords because I did not see anything. Anyway, since the deadline is coming up for filing, and there are so many new members, couldn't hurt,
right?
Kate, you and I are in the same boat.Dave - 3-7-2007 at 09:08 AM
Quote:
Originally posted by villadelfin
I just found out that having a mexican bank account that had over $10,000 USD equivalent for even one day necessitates the filing of IRS form TDF
90-22.1
I was also told that in 2004 the US government enacted a $10,000 penalty for failure to file
Anyone who has $10,000 in a Mexican bank account deserves to be penalized. Dave - 3-7-2007 at 09:13 AM
Quote:
Originally posted by osoflojo
Cant hide it in Switzerland anymore or about 200 other countries that signed the agreement.
Hong Kong's the place your money needs to be.
(Swimmin' pools...movie stars)SDRonni - 3-7-2007 at 12:26 PM
'Splain me, please. If you don't have a Mexican bank account, but have a fideicomiso and own property in Mexico, does this have to be reported to
IRS??? Why? Can we pay our Mexican bills (water, phone, electricity, taxes) w/our checks from our U.S. bank account?bajajudy - 3-7-2007 at 12:36 PM
VD
You do know that you can get an extension if you are not in the USA on April 15, dont you?Dave - 3-7-2007 at 12:43 PM
Quote:
Originally posted by SDRonni
'Splain me, please. If you don't have a Mexican bank account, but have a fideicomiso and own property in Mexico, does this have to be reported to
IRS??? Why?
Because they say so, period. No tax havens for U.S. citizens, anywhere.
Quote:
Originally posted by SDRonni
Can we pay our Mexican bills (water, phone, electricity, taxes) w/our checks from our U.S. bank account?
No, but you might find a bill paying service that will accept checks from your U.S. account. You deposit money, they pay the bills.SDRonni - 3-7-2007 at 01:05 PM
I don't understand about the property part. Will I be paying U.S. taxes on my Mexican property? How does owning a second home in Mexico affect my
U.S. taxes?baja829 - 3-7-2007 at 01:25 PM
You don't have to pay US taxes on your Mexican property. If you have a bank acct. in Mexico, you do have to check that box on your income tax return.
If it's more than $10,000, follow information noted above.
Most places here don't accept US checks for utilities, however, many lumber companies and other large stores do accept US checks if they know you. If
your U.S. check bounces, the fee to the merchant is now over $100 -- so be very careful, as news travels fast.Bruce R Leech - 3-7-2007 at 07:44 PM
check this thread and there are many more just try a search
The author says that he "recently" presented a paper to the IRS and Treasury Dept with a proposal to exempt fideicomiso from the reporting law or make
the process easier so the heavy penalties could be avoided.
He makes several valid points such as:
1. Those with property in the restricted zone get fideis because it's required by Mexican law..
2. Foreigners outside the R.Z. do not have to comply.
3. The fideicomiso is not a tax avoidance device.
4. Because the law regarding reporting Fideis to the IRS is so misunderstood, it unfairly exposes people to severe penalties.
"Exempting or simplifying the reporting requirements as to MRTs (fideis) would have a direct
benefit on reducing compliance costs both for taxpayers and the Service, would avoid
discriminating between taxpayers in similar situations, would avoid undue burdens on private
investment and will make sure that what happens in Mexico . . . , stays in Mexico17!
It would be interesting to know if he got anywhere with the IRS.SDRonni - 3-8-2007 at 08:59 AM
Me, too! So, what is the answer? Necessary to report or no?
I tried search but must have missed
the keywords because I did not see anything. Anyway, since the deadline is coming up for filing, and there are so many new members, couldn't hurt,
right? 