| | |  News Around the Republic of Mexico | September 2009 
Mexico Asks U.S. for Help in Finding Hidden Assets in U.S. Banks
 Kevin McCoy - USA Today
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September 18, 2009
| | Mexico Secretary of Finance Agustin Carstens | |
Hoping to replicate the United States' new success in hunting suspected tax evaders, Mexico is seeking financial data from foreign banks where its citizens are suspected of hiding assets.
But the accounts being targeted aren't in Switzerland or other historic tax havens. They're in the U.S.
Mexico Secretary of Finance Agustin Carstens outlined the strategy in a Feb. 9 letter seeking help for the tax crackdown from U.S. Treasury Secretary Timothy Geithner. He wrote that some Mexicans have stashed funds in U.S. banks, knowing the assets won't be disclosed back home.
Carstens, noting that the U.S. doesn't tax interest paid to non-resident aliens and that the two countries lack a way to identify the home of foreign depositors, wrote, "We simply are allowing both the tax avoiders and the criminals to move their money untaxed and benefit from it."
He asked Geithner to authorize data exchanges on interest banks in one country pay to residents of the other — a system the U.S. and Mexico have with Canada.
Such a mechanism would "provide us with a powerful tool to detect, prevent and combat tax evasion, money laundering, terrorist financing, drug trafficking and organized crime," Carstens wrote.
The Treasury Department said it had answered the request but wouldn't provide details.
Mexico's finance ministry declined to comment.
American Bankers Association spokesman Jonathan Snowling said the group had not taken a position on the issue.
Mexico's request came as the U.S. Justice Department pursued a successful federal court battle that requires Swiss banking giant UBS to provide account data for an estimated 4,450 wealthy American clients suspected of hiding money offshore.
Coupled with that battle, the IRS has offered suspected tax evaders lesser penalties if they come forward under a voluntary disclosure program that's scheduled to expire next week. Although the IRS hasn't disclosed the participation rate, the agency said there has been "a dramatic increase in the number of taxpayers making voluntary disclosures this year."
Carstens hopes to achieve similar success, said Robert Goulder, who first reported the request for Tax Analysts, a non-profit publisher where he's the chief editor for international tax issues.
Mexico's proposal could benefit the U.S. by targeting a funding source for violent drug gangs that operate on both sides of the border, Goulder said.
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