Wednesday, July 10, 2013

IRS Can Subpoena a U.S. Bank on Behalf of the Mexican Taxing Authority!

The Tenth Circuit  of the U.S. Court of Appeals upheld the denial of a motion by a Mexican citizen to quash a subpoena issued on behalf of the Mexican taxing authority (Villarreal v. United States, 10th Cir., No. 12-01131, 4/22/13).

The subpoena was issued by the Internal Revenue Service on behalf of the Mexican taxing authority, Servicio de Administracion Tributaria (SAT), to assist with SAT's investigation of Villarreal's 2009 tax liabilities. IRS's assistance was pursuant to an income tax treaty with Mexico.
The facts are straightforward. In March 2011, and pursuant to an income-tax treaty between the United States and Mexico, an official with Mexico’s taxing authority, the Servicio de Administraciόn Tributaria (SAT), asked the IRS for help in its investigation of Mr. Villarreal’s 2009 tax liabilities.
IRS issued a summons to the Bank that requested copies of account opening documents, signature cards, monthly statements, and certain deposit and withdrawal documents “pertaining to account no. [xxxxxxxx] and any other account associated with [Mr. Villarreal] (including any private banking
accounts associated with this account) for the period January 1, 2009 through December 31, 2009.”

Notice was sent to Mr. Villarreal as required by law, who then filed a motion to quash pursuant to 26 U.S.C. § 7609(b)(2). In the motion, Mr. Villarreal asked the district court to either quash the summons outright or conduct an evidentiary hearing to determine whether the IRS acted in bad faith.

Mr Villarreal made a motion to quash the subpoena and the court ruled against his motion.

Are you a Mexican Hiding Assets in the US?

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at Marini & Associates, P.A.
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