FBAR Filing Deadline Fast Approaching
posted Jun 18, 2013 by Paul Oliveira, CPA
Fast Approaching is the filing deadline for Form TD F 90-22.1 with the U.S. Treasury Department. Since the deadline falls on a Sunday (June 30th), this filing must be received by the Treasury department by June 28th, and there are no extensions.
A U.S. person generally is required to file Form TD F 90-22.1 with the U.S. Treasury Department to report the existence of a financial interest in, or signature authority over, foreign financial accounts (“Foreign Account”) that had an aggregate value of more than $10,000 at any time during a calendar year.
Under these rules, as more fully described below, shareholders of corporations and members of partnerships that have signature authority over Foreign Accounts and/or own greater than 50% of the “profit” of the corporation or partnership, may be required to file Form TD F 90-22.1.
Below is a summary of the main elements of the FBAR rules that may be of interest to entities and in particular, shareholders and/or officers.
Who Has to File the Form?
Any U.S. citizen, resident, or entity (this includes branches, trusts, estates, syndicates, and other unincorporated organizations and groups) formed in the United States having a “financial interest” in, or “signature or other authority” over, a bank, securities or “other financial account” in a foreign country.
A person has a “financial interest” in a Foreign Account if: (1) such person is the record owner or has legal title to the account, irrespective of whether the account is held for such person’s own benefit or for the benefit of others; or (2) the record owner or title holder is (a) a person acting as an agent, nominee, attorney or in some other capacity on behalf of the U.S. person with respect to the account, (b) a corporation in which the person owns (directly or indirectly) more than 50% of the voting power or value, (c) a partnership in which the U.S. person owns (directly or indirectly) more than 50% of the capital or profits interest, (d) a grantor trust of the U.S. person, (e) a trust in which the U.S. person either has a present beneficial interest in more than 50% of the assets or from which such U.S. person receives more than 50% of the current income, or (f) any entity (other than a corporation, partnership or trust) in which the U.S. person owns (directly or indirectly) more than 50% of the voting power, value of the equity interest or assets, or profits interest.
A person has “signature or other authority” over a Foreign Account if the person is able to control the disposition of assets in the account by direct communication (in writing or otherwise) to the institution holding the account. Only an individual can have signature or other authority over a Foreign Account. Therefore, employees, shareholders, and officers of the corporation or partnership may be required to report that they have signature or other authority over a foreign financial account of the company.
Please note the exceptions as stated in the instructions to the TD F 90-22.1:
IRA owners and Beneficiaries are not required to report a foreign financial account held in the IRA.
A participant in or beneficiary of a retirement plan described in IRC 401(a), 403(a), and 403(b) is not required to report a foreign financial account held by or on behalf of the retirement plan.
KLR is a premier provider of international tax services to middle market companies and works with both foreign-based companies moving to the U.S. market as well as domestic companies that do business around the world. The KLR International Tax group is available to assist clients with any tax issues pertaining to either inbound or outbound tax issues, both from a corporate perspective as well as for multinational families. Those issues may include the IRS’ Voluntary Disclosure Program, planning for intellectual property transfers, transfer pricing, export incentives, and global restructuring projects.