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arrowhead
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| Quote: | Originally posted by MitchMan
I refer to my original question stated above which boils down to this..."What's the probability of discovery if you never transact money across the
border and you never file any IRS disclosure forms?" |
Simple enough to answer, if you would tell me what the probability is that Mexico would send a data file to the IRS with the names of every
beneficiary of a fideicomiso registered with the Foreign Ministry. I would say over the long run, the probability approaches 100%.
No soy por ni contra apatía.
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MitchMan
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Arrowhead, , if I would tell you what the probability is that Mexico would send a data file to the IRS with the names of every beneficiary of a
fideicomiso registered with the Foreign Ministry, that would be answering my own question. Arrowhead that is my question, restated in another way.
Why would you say over the long run, the probability approaches 100%. Define "long run". Also, why would you say 100% and not 90% or 10%? I mean,
based on what specifically?
I don't intend to come across argumentatively. If you know something specifically and objectively, please share it with us as that would be extremely
value info. Personally, I have my "hunches" as well, but they don't really translate to fact.
As in my references above to oncoming traffic, air travel, etc., tangible accurate statistics exist and human behavior takes these stats into account
and feel the pro bability of danger is so remote as to discount it completely and people continue to fly and drive on two lane highways.
The other question still remains, does anyone know of anyone who was discovered to have a fido or be a signer on a Mexican bank account or own a
Mexican Corp and did not file the requisite IRS annual disclosure forms?
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MitchMan
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Arrowhead, , if I would tell you what the probability is that Mexico would send a data file to the IRS with the names of every beneficiary of a
fideicomiso registered with the Foreign Ministry, that would be answering my own question. Arrowhead that is my question, restated in another way.
Why would you say over the long run, the probability approaches 100%. Define "long run". Also, why would you say 100% and not 90% or 10%? I mean,
based on what specifically?
I don't intend to come across argumentatively. If you know something specifically and objectively, please share it with us as that would be extremely
value info. Personally, I have my "hunches" as well, but they don't really translate to fact.
As in my references above to oncoming traffic, air travel, etc., tangible accurate statistics exist and human behavior takes these stats into account
and feel the pro bability of danger is so remote as to discount it completely and people continue to fly and drive on two lane highways.
The other question still remains, does anyone know of anyone who was discovered to have a fido or be a signer on a Mexican bank account or own a
Mexican Corp and did not file the requisite IRS annual disclosure forms?
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arrowhead
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Here's the US-Mexico Tax Treaty. Read Article 27 on information sharing. All the IRS has to do is ask Mexico for the names on the fideicomisos and
Mexico is obligated by treaty to report it.
http://www.irs.gov/pub/irs-trty/mexico.pdf
tick...tick...tick...
No soy por ni contra apatía.
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toneart
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Arrowhead,
This treaty concerns taxes on income. It also provides for the exchange of information as it pertains to income. This treaty has been in existence
since 1992 and I don’t know anybody who has filed a form 3520 or 3520-A or has heard from the IRS regarding their 2nd home residence in Mexico.
This exchange could be accelerated due to the sudden negotiations with Switzerland and new attempts to obtain records of all other hidden offshore
investments. So, even if Mexico should exchange information about holders of Fideicomisos, as long as we aren’t renting out our houses, why would the
IRS care?
We pay property taxes to the municipal government in Mexico. If the IRS should be concerned, then I would start writing off losses incurred in two
floods, without compensation, being situated in the flood zone of The Mulege River. That would seem to be a wash (pardon the pun).
If we should sell out houses and incur a Capital Gain, then we would pay that to the Mexican Government. My understanding is that there would be no
double taxation under this treaty. By the way, under current and foreseeable market conditions, I doubt seriously whether there would be a Capital
gain.
“THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF
AMERICA AND THE GOVERNMENT OF THE UNITES MEXICAN STATES FOR THE
AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME, TOGETHER WITH A RELATED PROTOCOL,
SIGNED AT WASHINGTON ON SEPTEMBER 18, 1992”
Lastly, we have nothing to hide by owning a house in Mexico in a Fideicomiso. For one thing, the Fido only covers the stated value of the land
portion. It does not wrap the value of the structure. I would think that if we were cited for not filing the forms 3520/3520-A, the IRS would not
exercise the application of a fine as long as we can prove the ownership of the house is for owner occupancy only. Again, we are not evading any
taxes! (Of course, they could do anything they want, but it is my opinion that they wouldn’t. I think it is worth the chance to not involve the IRS).
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slimshady
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Its appears from the above references that one should report the sale to the IRS should they wish to bring funds from the sale of a mexican property.
The paying of taxes in either the U.S. or Mexico applies to the treaty. As should be expected you should pay your taxes on such a sale.
Now reporting something to the IRS that produces no income and is purely a holding mechanism for mexican property in the restricted zone, is
ridiculous.
The IRS is concerned about income and not reporting it. If you rent or sell your property they may be interested in taxing you.
Simply don't list the asset as a deduction and don't bring the money in and you should be fine.
One of the above posters said you should get an EIN number for your trust and file a form ss44, and then use the number on your 3520 form. Seems like
a alot of work for something that is questionable.
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MitchMan
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A couple of things that we are all missing the point on. You have to be DISCOVERED by the IRS for non-filing, that is, the IRS has to know about your
non-filing before they impose a penalty on you, right?
There are two considerations here. It has already been established that if you have a Fido, are a signer on a Mexican bank account, or are a managing
owner (usually the majority shareholder) of a Mexican corporation, you are required by the IRS to file certain IRS forms for each of those items
disclosing such, probably every year. That these are IRS requirements are not in question here. The other item not in question is that there is a
treaty that provides for sharing information between USA and Mexico.
The question is whether or not information is actually shared leading to actual knowledge by the IRS of persons holding Fidos, signing on Mexican bank
accounts or owning a Mexican corporation.
If no one has ever heard of anyone getting in trouble for simply non-filing, that could be a reliable indication that info between the countries is
not being shared. The treaty has been around since 1992!
Above posts reflect one person saying that they have never heard of the IRS discovering or imposing a fine on anyone for non-filing of the discloser
pertaining to a Fido. That could be a reliable indication that info exchange has not and is not being exchanged. It would appear that US
taxpayer/Fido holders/non-filers will not encounter fines upon discovery so long as they themselves don't inadvertently disclose it to the IRS and do
not transfer money across the border using either countries' financial institutions. An extension of this could hold true for those that are signers
on Mexican bank accounts and/or own Mexican Corporations.
Again, has anyone ever heard of anyone ever getting in trouble FOR NOT FILING the IRS disclosure forms regarding 1)owning a Fideicomiso, 2)being a
signer on a Mexican checking account or 3)being an owner of a Mexican corporation WHEREIN the US citizen has not sold property subject to the Fido not
transfered funds to/from Mexico using either countries' financial institutions and not inadvertently disclosed it to the IRS themselves?
In other words, is there any real possibility of getting in trouble with the IRS for non-filing of disclosure forms in any of the three instances
above so long as you do not transfer money between either country's financial institutions nor sell a fido property or disclose it yourself
inadvertently? The proof of the pudding is whether or not anyone has ever heard of anyone getting in trouble in spite of the preceding conditions?
BTW, there could be (I don't know myself in this instance) a separately enforceable penalty for simply not filing a disclosure form whether or not
there is ever a taxable transaction.
[Edited on 8-17-2009 by MitchMan]
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k-rico
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Mitchman, I get a chuckle out of your reasoning. The criminal mind, you have to be caught to be penalized. But I get you, not following IRS rules is
more of a tradition than a crime, right.....................?
Here's a real world scenario, let's say my tired uninsured body gets real sick and the doctors force me into bankruptacy.
Will telling the IRS about my foreign trust require me to liquidate it so the doctors can make their next yacht payment?
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slimshady
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It's not about being of the criminal mind or not. Its about reporting to the taxing authority information about an entity that they really don't
understand or care to understand. The IRS is clearly interested in taxing you and separating you from your money.
We all love baja for its various reasons. I particularly like the somewhat unorgainized way things run and the remoteness. If I wanted something else
I would hangout here in the O.C. and live like sheep.
Will I report my everyday situations to the feds "just because" and the answer is "No!". Will I pay taxes to the Mexican tax authority when I sell and
the answer is "yes".
So until any of that happens I will do nothing.
Also is getting South Dakota plates illegal too? Should we report ourselves too? I think not.
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MitchMan
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K-rico, got a flash for you. Did you know that there are major US companies, right now, that commit the illegal act of tax evasion, all the time,
every day, every minute? They go out of their way to deliberately stay under the radar and do not report the truth. In the world economy and locally
here in the USA it is known as "prudent business practice".
There are many huge successful long standing companies that openly keep funds in reserves in the magnitute of millions of dollars in what is known as
the "cushion" to absorb a hit in taxes when they are discovered by taxing authorities. Keeping the reserve and paying on the occasional discovery is
much, much cheaper than being 100% honest and disclosing/paying all that is legally due. If any company did that, they couldn't afford to be
competitive with all the competition that maintain the "cushion" instead. Keep in mind that the corporate tax rate takes a substantial portion of
profits.
If you, as an American citizen, feel that 100% disclosure "because it's the Law" is the only moral way to be, then you would never have a place in
wall street, you couldn't be a politician, you couldn't run a big company like General Motors, or AIG, work for the FBI or CIA, or have much of a
chance at being rich and maintaining your equity. In short, you would be ruinously naive and would be the endless subject of exploitation and at a
great, great disadvantage in a capitalistic society. Secrecy, in our society, is insurance, just ask VP Cheney if you don't believe me.
Again, has anyone ever heard of a US taxpayer who is a Fido holder, and/or a Mexican checking account signer, and/or a Mexican corp owner ever being
discovered by the IRS for non-filing of the IRS disclosure forms wherein the taxpayer did not inadvertently disclose it him/herself and where no
monies were transfered between Mexican and USA financial institutions?
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k-rico
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ok, ok, ok mitchman you've switched from it's OK if you don't get caught to everyone else does so it's OK. whatever....
What about my real world scenario?
[Edited on 8-18-2009 by k-rico]
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DENNIS
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| Quote: | Originally posted by slimshady
Also is getting South Dakota plates illegal too? Should we report ourselves too? I think not. |
I hope not. Can't see why it would be. Insurance while driving in the states should be the issue.
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slimshady
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If you register CA plated car in South Dakota even though the car has never been there and you probably haven't either, with the sole intent of not
paying the high CA registration fees, smog checks, and mandatory insurance, then you are committing a crime. Should one report it to the South Dakota
authorties? I think not. Loopholes exist and smart people figure things out. Sheep just follow and get slaughtered.
Same with the FIDO. If one is to clearly involve the government in their personal as well as business financal situations, they must be idiots. You
will only open yourself to audits and more scrutiny as well as a cluster in obtaining various tax and bank statements, receipts, FIDOs, EIN number,
SS-4m 3520 form, both Mexican and USA accounting service charges, time and money for the sake of giving the feds info on something they know nothing
about.
Its a simple matter of privacy and personal financial discretion. The least they know the better off you are.
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MitchMan
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Slimshady,
Your response is the most rational, realistic, experiencial, and sanist response to this thread. I can tell that your experience with both Mexican
and USA administration has been the same as mine.
I thank the gods for people like Slimshady and many others that contribute to this forum.
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DENNIS
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| Quote: | Originally posted by slimshady
If you register CA plated car in South Dakota even though the car has never been there and you probably haven't either, with the sole intent of not
paying the high CA registration fees, smog checks, and mandatory insurance, then you are committing a crime. |
What do you mean.. crime. What crime? I mentioned having insurance. If my Ca. license is alive and well, the car is currently registered in SD,
and I'm insured to be on the USA roads, what's the crime? Is it a crime to repell from exorbitant taxes? What crime are you referring to?
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DENNIS
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| Quote: | Originally posted by slimshady
with the sole intent |
Gawwwdallmity....I can't get over this. Who's going to be the judge of my sole intent? Arnold? Who?
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BajaGringo
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| Quote: | Originally posted by DENNIS
What crime are you referring to?
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It's those evil thoughts Dennis...
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DENNIS
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| Quote: | Originally posted by BajaGringo
It's those evil thoughts Dennis...
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They're taxing those too. Why am I not surprised. They tax the demons and they tax the meds that deal with them. This is Karl Marx's finest hour.
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BajaGringo
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| Quote: | Originally posted by DENNIS
| Quote: | Originally posted by BajaGringo
It's those evil thoughts Dennis...
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They're taxing those too. Why am I not surprised. They tax the demons and they tax the meds that deal with them. This is Karl Marx's finest hour.
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Personally I think Orwell had it right, except he was just 25 years ahead of his time...
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slimshady
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Don't take it personally about the registration thing. I have done the same and really don't care about what the out of control State of Califonia
thinks. Same with the FIDO, less info the better. Loopholes exist and we will take care of them.
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