Foreign Bank Account Report, Treasury Department Form 90-22.1 (FBAR)



Who Must File an FBAR:
Generally, every U.S. person with a financial interest in or signature or other authority over, any financial account outside of the United States, must file an FBAR if the aggregate value of all accounts exceeds $10,000 at any time during the calendar year. An FBAR must be filed by U.S. taxpayers that have signature authority over any account, even if they have no financial interest in or are not the owner of the account. Such accounts include but are not limited to: bank, securities, pension funds, other financial accounts, any accounts with commingled funds, any accounts held by entities for which the individual is a shareholder/owner, etc.

FBAR Filing Deadline:
The FBAR must be received on or before June 30th of the year following the calendar year being reported. It is not filed with your federal tax return. June 30, 2012 falls on a Saturday this year, but there has been no official announcement that individuals will not face late filing penalties if the FBAR is not received by the deadline. Therefore it may be prudent to file so that it is received by June 29, 2012.
There are three (3) pages of instructions and information as to the specific form and instructions can be found on irs.gov and/or bsaefiling.fincen.treas.gov. It should be noted that the information provided on these sites (as well as this site) should not be construed as legal advice.

How FBAR information can be used:
The information collected by the reporting can be provided to officers and employees of any division of the Treasury Department. These records may be utilized in performance of their duties and investigations as well as referred to other federal, state or local authority upon request for use in criminal, tax, regulatory investigation or proceeding, or other investigations and matters.

Do you need an attorney for FBAR issues?
If you have never filed an FBAR but should have --> you should immediately consult with a tax attorney familiar with international tax law or with a CPA that was with the IRS division of international tax.
If you are concerned about how the information will be used or could be used against you --> you should immediately consult with a tax attorney familiar with international tax law and financial/white collar crime defense or with an ex IRS official who is a CPA.

If you filed an incomplete or false FBAR --> you should immediately consult with a tax attorney who is familiar with international tax law and financial/white collar crime defense or with a CPA that was with the international division of the IRS.

How to get your tax law questions answered - confidentially:
You may wish to consult with an experienced tax attorney or with an ex IRS agent before filing the FBAR form or any other financial document that is requested or required of you because a seemingly simple form (admittedly, financial forms are never "that" simple) have far reaching consequences that can come back to haunt you



The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.

7 comments:

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    How to get your tax law questions answered - confidentially:
    You may wish to consult with an experienced tax attorney or with an ex IRS agent before filing the FBAR form or any other financial document that is requested or required of you because a seemingly simple form (admittedly, financial forms are never "that" simple) have far reaching consequences that can come back to haunt you
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  2. As an expert witness Lance Wallach side has never lost a case

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    For many years the IRS argued that premiums paid into a captive insurance company were not deductible due to the related ownership of the insured and insurer (referred to as the “economic family doctrine”). In 2001, after consistently losing in tax court on this premise, the IRS abandoned the economic family doctrine. IRS not only abandoned the economic family doctrine but also began to provide guidance, through revenue rulings 2002-89, 2002-90 and 2002-91, as to how to properly create a captive insurance company. Since 2002, as this area of planning has evolved, the IRS has continued to provide clear guidance which uphold the validity of captive insurance arrangements.

    In today’s litigious environment, many large and small businesses have captive insurance arrangements in place which insure a wide range of risks not insured in their commercially procured property and casualty coverage. Certain captive arrangements may elect IRC 831 (b) status which allows the captive insurance company to receive annual premiums of less than $1.2 million income tax free.

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  4. IRS: Disclose Offshore Accounts or Go to Jail

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  5. Like - Click this link to Add this page to your bookmarks Share - Click this link to Share this page through email or social media Print - Click this link to Print this page
    Foreign Financial Accounts Reporting Requirements
    Update Jan. 24, 2014 — Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, is obsolete. IRS.gov. After June 30, 2013, the FBAR must be filed electronically with FinCEN.
    FS-2007-15, February 2007
    With the globalization of the economy, more and more people in the U.S. have foreign financial accounts. While there are many legitimate reasons to own foreign financial accounts, there are also responsibilities that go along with owning such accounts. Foreign account owners must remember that they may have to report their accounts to the government, even if the accounts do not generate any taxable income.
    Who is required to report their foreign accounts to the government, and how do they do so? The Bank Secrecy Act requires U.S. persons who own a foreign bank account, brokerage account, mutual fund, unit trust, or other financial account to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Authority (FBAR), if:
    The person has financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
    The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
    A U.S. person is:
    A citizen or resident of the United States, or
    Any domestic legal entity such as a partnership, corporation, estate or trust.
    A foreign country includes all geographical areas outside the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the territories and possessions of the United States (including Guam, American Samoa, and the United States Virgin Islands). An account in an institution known as a United States “military banking facility” is not considered to be an account in a foreign country.
    The FBAR is not an income tax return and should not be mailed with any income tax returns. The FBAR must be mailed on or before June 30 of the following year to: U.S. Department of the Treasury, P.O. Box 32621, Detroit, MI 48232-0621.
    Unlike with federal income tax returns, requests for an extension of time to file an FBAR are not granted.
    A person having signature or other authority over, but no financial interest in, a foreign financial account may be excepted from filing an FBAR if they are an officer or employee of a federally-regulated bank or a federally-regulated publicly traded corporation. See the FBAR instructions for more information about this exception.
    Why is it important to file the FBAR? The FBAR is required because foreign financial institutions that do not conduct business in the United States may not be subject to the same reporting requirements that domestic financial institutions are subject to (such as the requirement to file a Form 1099 to report interest paid to an account holder). Although there are legitimate purposes for having a foreign account, the FBAR is a tool to help the U.S. government identify persons who may be using foreign financial accounts to circumvent U.S. law.
    Such individuals may be participating in economic crimes such as income tax evasion or embezzlement, or they may be trying to fund o

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  7. TA Report Identifies IRS' OVDP / OVDI As Problem (1/9/13)
    The Taxpayer Advocate has issued her new Report to Congress, here.

    In it, she identifies specific problems, among which is: The IRS’s Offshore Voluntary Disclosure Programs Discourage Voluntary Compliance by Those Who Inadvertently Failed to Report Foreign Accounts, here.

    Eliezer Mishory, a 2L student at George Washington University Law School, notified me of the Report and provided the following summary (which I may supplement later after I have had time to review in detail):
    It may be newsworthy that the OVDP “made it” to Nina Olsen’s Taxpayer Advocate Report to Congress as “Most Serious Problem” number 8. I have only scanned the report but it seems that her chief grievances are (1) that the program treats “benign actors” who had reasonable cause or inadvertently failed to file FBARs the same way as “bad actors”, (2) the difficulty in opting out of the OVDP, and (3) the unnecessary burden on taxpayers caused by the overlap of FBAR and Form 8938.
    The report recommends establishing three (3) categories of taxpayers:
    1) Taxpayers who only underpaid a small amount should be able to come compliant without any penalties (essentially expanding the new program for foreign residents to include taxpayers who reside in the US).
    2) Taxpayers who have reasonable cause, or inadvertently failed to file ("benign actors"), should be able to pay the lower non-wilful FBAR penalties without having to opt out of the OVDP.
    3) Taxpayers who are not category 1 or 2 should come forward under the current OVDP rules.

    ReplyDelete