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TexLaw, Attorney
Category: Legal
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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This question is probably under "International law". My brother

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This question is probably under "International law". My brother is a mexican citizen, he lives in Mexico and he has 3 Bank accounts, one is a money market account, the other two are checking and deposit accounts, and the question is: under a new treaty between US and Mexico since last year each country has to notify the other country about any bank account that their citizens have in their respective country. Is that correct?

Thank you for your question.

You are not exactly correct.

There are two sets of law that apply here. The first is the US-Mexico Treaty on Taxation, which prevents citizens in each country from hiding money in a bank account in the other country without paying tax on it. The second is the Foreign Account Tax Compliance Act, which requires that foreign banks disclose when an American citizen has a bank in another country.

In your brother's situation, if he is earning income in the United States and transferring it to a bank account in Mexico, if the transfer is over $10,000, it will trigger a report to the US Government which will identify his account. However, the simple fact that he has an account which has nothing in it but Mexican income will not be reported as long as he is not also a US citizen.

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Best Regards,
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