Agreement for Simultaneous Examinations
of Tax Returns Between
the United States & Mexico

WASHINGTON - The Internal Revenue Service today announced a formal working arrangement covering simultaneous examinations of tax returns between the United States and Mexico.

Simultaneous examinations make it possible for tax treaty and tax information exchange agreement (TIEA) partners to exchange information and coordinate the tax treatment of individuals and businesses with activities in more than one country.

The TIEA between the U.S. and Mexico, in effect since Jan. 18, 1990, authorizes exchanges of information to carry out the TIEA's purposes and to prevent tax evasion. Information obtained in the exchanges is used to supplement the information taxpayers and others submit to the IRS. Specific terms of the TIEA protect confidentiality of taxpayer information exchanged by both countries.

Under terms of the working arrangement announced today, the U.S. and Mexico will meet to plan and coordinate their audits. Each country will then separately examine the taxpayers under their jurisdiction, but during each stage of the examination, both countries will exchange information in accordance with the TIEA.

This is the twelfth such simultaneous examination working arrangement the United States has formalized with another country and the first pursuant to a TIEA. The others are with Canada, the United Kingdom, France, Germany, Italy, Japan, Sweden, Australia, the Philippines, Norway, and Korea.

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