FBAR: Foreign Bank and Financial Accounts Reporting Extensions

The Financial Crimes Enforcement Network and the Internal Revenue Service have recently issued several extensions to the reporting requirements of Foreign Bank and Financial Accounts (“FBAR”). For your reference, here’s a roundup of FBAR-related commentary and analysis from lawyers and law firms publishing their work on JD Supra:

FBAR Filing Deadline for Extensions for Certain Individuals With Signature Authority (McDermott Will & Emery):

“The Financial Crimes Enforcement Network and the Internal Revenue Service recently issued three notices, FinCEN Notices 2011-1 and 2011-2 and IRS Notice 2011-54, granting an extension of the filing deadline for the Report of Foreign Bank and Financial Accounts (FBAR), IRS Form TD-F 90-22.1 to different groups of individuals with signature or other authority over certain foreign financial accounts for various filing years.” Read more»

Two More Extensions: IRS and FinCEN Issue Extensions for Certain FBAR Filers in IRS Notice 2011-54 and FinCEN Notice 2011-2 (Morgan Lewis):

“On June 16, the Internal Revenue Service (IRS) issued Notice 2011-54, which provides that U.S. persons having signature authority over, but no financial interest in, foreign financial accounts in 2009 or earlier calendar years for which the reporting deadline was extended by Notice 2009-62 or Notice 2010-23 will now have until November 1, 2011 to file Foreign Bank and Financial Accounts (FBARs) with respect to those accounts.” Read more»

Foreign Bank and Financial Accounts Reporting (“FBAR”) and Amnesty Through August 31, 2011 by David C. Morganelli, Esq. (Partridge Snow & Hahn LLP):

The IRS is currently offering an amnesty program through August 31, 2011 for past due reporting regarding offshore accounts. An initial amnesty program closed on October 15, 2009, and many individuals simply did not learn of its availability until it was too late. … The opportunity to avoid criminal prosecution resulting from an undeclared offshore account should serve as a major incentive to participate. Amnesty will also reduce the civil penalties from 50% of the value of the account each year to a single penalty of 25% of the highest value of the account over the past eight years.” Read more»

FinCEN Extends FBAR Filing Deadline for Certain Officers and Employees – Does This Portend Changes? (Sutherland Asbill & Brennan LLP):

“On May 31, 2011, in FinCEN Notice 2011-1, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the 2010 Report of Foreign Bank and Financial Accounts (FBAR) filing deadline from June 30, 2011, to June 30, 2012, for certain officers and employees with signature authority but no financial interest in a foreign financial account.” Read more»

New FBAR Extension for Investment Managers (Foley Hoag LLP):

“As we described in the Foley Adviser of June 21, 2011, an officer or employee of a registered investment adviser is also not required to file an FBAR to report signature authority over a foreign financial account of an investment company registered under the Investment Company Act of 1940 to which the registered investment adviser provides services, so long as the officer or employee has no financial interest in the account. This is a permanent exemption, not a deferral. The last-minute deferral granted for foreign financial accounts of other persons in addition to registered investment companies may indicate that the authorities are considering extending the permanent exemption to these accounts, as well.” Read more»

FinCEN and IRS Extend Certain FBAR Filing Deadlines (Morrison & Foerster LLP):

“During the past few weeks, the Financial Crimes Enforcement Network (“FinCEN”) and the Internal Revenue Service (“IRS”) released three notices affecting the filing of Form TD F 90-22.1 “Report of Foreign Bank and Financial Accounts” (“FBAR”), which are discussed below. In general, each U.S. person who has a financial interest in or signature or other authority over any foreign financial account, including bank, securities, or other types of financial accounts in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year, must file an FBAR with the Department of the Treasury on or before June 30th of the succeeding year.” Read more»

Last Minute FBAR Extensions for “Signature Authority Only” Filers – Making Sense of the Announcements (Sutherland Asbill & Brennan LLP):

“In the past week, two extensions for filing a Report of Foreign Bank and Financial Account (FBAR) were announced by the IRS and FinCEN for certain persons that are required to file FBARs solely as a result of their signature authority over a foreign financial account in which they have no financial interest. These extensions are in addition to the June 6, 2011, clarification of FinCEN Notice 2011-1 (May 31, 2011), which extended the FBAR filing due date for certain officers and employees of regulated entities or controlled entities of a regulated entity.” Read more»

Extension and New Guidance for the Voluntary Disclosure Initiative for Undisclosed Foreign Assets (Katten Muchin Rosenman LLP):

The new guidance … allows taxpayers to request up to a 90-day extension to submit all necessary documentation under the program; provides reduced FBAR penalties for certain U.S. taxpayers who reside in foreign countries and have been compliant with such countries’ tax obligations; and provides examples and procedures for taxpayers to opt out of the civil settlement structure of the OVDI program.” Read more»

IRS Announces Changes to FBAR Rules (Foley Hoag LLP):

“The Internal Revenue Service announced on June 16, 2011, that individuals with signature authority over (but no financial interest in) foreign financial accounts during the 2010 calendar year must file an annual report on Treasury Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, or “FBAR”) by the regular June 30, 2011, deadline. In the past, the IRS had granted repeated deferrals for such filings while it studied the matter; for prior years, these deferrals have now been further extended to November 1, 2011.” Read more»

Additional Commentary and Analysis

New FBAR Rules Significantly Increase Employee Filings (McNees Wallace & Nurick LLC):

“Did you know that if you have a bank account outside of the United States, you may be required to file a Treasury Form 90-22.1 with the U.S. Treasury every year? There are strict penalties in place for those who fail to file this form. Although the regulation is intended to uncover secret off-shore accounts, anyone who has a foreign bank account is swept up by the law.” Read more»

Who Should Opt Out of the Offshore Voluntary Disclosure Program and Why (Sanford Millar):

“The 2009 program required, among other things, the payment of a civil penalty that was calculated based upon 20% of the “penalty assets”. Penalty assets included foreign financial accounts for which FBAR’s were due but unfiled, interests in foreign partnerships, trusts and corporations for which information returns were due but not filed and foreign income producing assets (like real property) for which no income was reported. In addition to the civil penalty income tax on the unreported income was assessed along with a 20% accuracy related penalty and interest.” Read more»

2 IRS Voluntary Disclosure Program Facts (Darrin Mish):

“The IRS has been having an Offshore Voluntary Disclosure program for those who have not been paying taxes on their offshore bank accounts to voluntarily step forward and declare their assets in exchange for a lighter punishment. The deal is that if you participate in the Voluntary Disclosure program, you will escape criminal prosecution and be let off with payment of penalties, fines and interests on your taxes. The closing date to participate is August 31 this year.” Read more»

FBAR—Foreign Bank Account Reporting—2011 update (Karen Monroe):

“U.S. Persons (U.S. Citizens, U.S. residents, and persons subject to the jurisdiction of the U.S. including individuals, all forms of business entities, trusts, certain trust beneficiaries and estates) with signature authority over or a financial interest (direct or indirect) in any foreign financial account are required to file Form TD F 90-22.1 “Report of Foreign Bank and Financial Accounts” (“FBAR”) by June 30 of each year if the aggregate value of all such accounts exceeded $10,000 at any time in the prior year. The form must be received by the US Treasury by the June 30 deadline and NO extension of time to file is allowed.” Read more»

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