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US Expats in Mexico and Denmark on 1/1/13 Will Have Their Financial and Tax Information Disclosed to US
The United States has entered into its second and thir bilateral exchange of financial and tax information agreements regarding the implementation of FATCA with Mexico and Denmark. This new agreements target non-compliant U.S. taxpayers owning foreign accounts.The agreemenst will be become on January 1, 2013.
The reciprocal nature of the United States' agreement with Mexico and Denmark 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 over.
Now is the time to start reporting to the IRS all of your previously unreported Mexican and Denmark business and financial activities before these new programs are geared up. If in the future the IRS discovers you have unreported income or assets in Mexico or Denmark, 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.