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Wednesday, June 10, 2009

FOREIGNERS RELEASED FROM FBAR OBLIGATION

We previously wrote about how the instructions to Form TD F 90-22-1 (Report of Foreign Bank and Financial Accounts) (commonly referred to as the “FBAR”) were recently revised to include some non-U.S. persons in the reporting net. Likely due to public concerns that requiring non-U.S. persons to report their foreign accounts to the U.S. government would adversely affect foreign investment in the U.S., the IRS is now backpedaling. In a recent announcement, it is indicating that in regard to FBAR forms due on June 30, 2009, the OLD definition of a reporting person will continue to apply – the old definition does not include foreign persons or entities.

The announcement indicates that this limitation only applies for the June 30, 2009 filings. Therefore, a wait-and-see approach is needed to determine if this revision will be made permanent.

Announcement 2009-51

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