Saturday, March 06, 2010

2009 FBAR REPORTING RELIEF

Treasury Form TD F 90-22.1 (commonly known as the “FBAR”) is used by taxpayers to report financial interests in, or signature authority over, foreign accounts. Several official announcements have come out recently that address some of the filing requirements. The form for 2009 filings is due by June 30, 2010.

A. DEFINITION OF U.S. FILERS. The definitions of U.S. person in the 2008 form instructions will not apply for 2009 filings. Instead, the 2000 form instructions will apply. Under the prior version of the form, a U.S. person is defined as a (1) citizen or resident of the U.S., (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.

B. FILINGS BY NON-U.S. PERSONS. The filing obligations for non-U.S. persons are suspended for 2009.

C. SIGNATURE AUTHORITY ONLY. Persons with signature authority over, but no financial interest in, a foreign financial account for which a FBAR would otherwise have been due on June 30, 2010, will now have until June 30, 2011, to report those foreign financial accounts.

D. COMMINGLED FUNDS. the IRS will not apply its enforcement authority adversely to persons with a financial interest in, or signature authority over, any foreign commingled fund other than mutual funds with respect to that account for calendar year 2009 and earlier calendar years.

E. COORDINATION WITH INCOME TAX RETURN DISCLOSURES. Taxpayers who are exempt from filing an FBAR pursuant to the above rule modifications are likewise permitted to not disclose those accounts on the foreign account disclosures on their individual income tax return forms.

In addition to the above, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) has issued proposed regulations that will revise the reporting rules. If finalized, the new rules will be reflected in revised FBAR instructions. The new rules will revise the definition of  U.S. person, provide for various filing exemptions, and provide expanded definitions of other statutory terms.

Announcement 2010-16; Notice 2010-23; DEPARTMENT OF THE TREASURY, 31 CFR Part 103, RIN 1506–AB08, Financial Crimes Enforcement Network; Amendment to the Bank Secrecy Act Regulations—Reports of Foreign Financial Accounts

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