Last updateFri, 19 Oct 2018 7am

Mexican charities and IRS tax deductible contributions

Sometime back I noticed interesting language in the U.S-Mexico tax treaty. 

The treaty is an agreement for the purpose of minimizing double taxation between both countries.  Article 22 allowed deductions against U.S. income tax for contributions to Mexican charities.  Intrigued, I picked up the phone.

The SAT, the Mexican IRS, publishes a regularly updated list of all recognized charities, much like its American counterpart.  The lengthy list even has a section of entities that are authorized to receive “donations from abroad”.  I was excited, because there it was in the treaty.  Authorized Mexican charities, check.  The treaty says that deduction amounts are among others, limited to Mexican sourced income. Ok, I get that.  Normally, US tax-deductible charitable contributions have to be made to US charities – the “501(c)(3)” organizations you may know about.

I decided to look on the IRS side to make sure this was as it appeared to be.  Finding who within the IRS had any clue about this was a task by itself.  Finally, I located the right IRS attorney in Washington.  Friendly guy, but with lots of “oh, hmm, ehmms”.  Those tell me I am on to something I should not have asked about.

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