May 1, 2013
Reminder: Foreign Bank & Financial Accounts
The IRS continues to step up its enforcement of foreign assets, imposing substantial penalties for noncompliance.
The deadline to file Form TDF 90-22.1 – Report of Foreign Bank and Financial Accounts (FBAR) is June 30th. There is no extension of time granted for the filing of this form.
Who does this apply to? Individuals, trusts, estates, and other domestic entities (ex. Corporations, partnerships) taxpayers that have an interest in foreign financial accounts and meet the reporting threshold. An interest in a foreign financial account includes signature authority on an account, title of an asset, or greater than 50% interest in an entity.
What is the reporting threshold? $10,000 of foreign assets at any time during the calendar year.
What is reported? Maximum value of financial accounts maintained by a financial institution physically located in a foreign country.
What are the penalties for not filing? Up to $10,000 if non-willful, up to the greater of $100,000 or 50-percent of account balances, if willful; criminal penalties may also apply.
Separate reporting requirements and thresholds apply to Form 8938 – Statement of Specified Foreign Financial Assets. This form is filed in conjunction with your tax return
Please click here for more information on the exact reporting requirements.
For those who have unreported foreign assets for prior years, the IRS/FTB still has their voluntary compliance measures in place. If you have any questions, we welcome the opportunity to speak with you.