Foreign Bank Account Regulation (FBAR) Deadline Approaching
Foreign Bank Account Regulation (FBAR) Deadline Approaching

Foreign Bank Account Regulation (FBAR) Deadline Approaching

If you have a financial interest in a foreign bank account, you should be familiar with filing Form TD F 90-22.1. Regulations regarding this form have changed as recently as June 6, 2011 . These changes affect a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust or other type of foreign financial account then you may need to file Form TD F 90-22.1 by the June 30, 2011 deadline.
United States persons are required to file TD F 90-22.1 if they had financial interest in or signature authority over at least one financial account located outside the United States and the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year.

TD F 90-22.1 is filed separately from your income tax return and must be filed even if the accounts did not produce any income.  There are some exclusions to the filing requirement, such as foreign accounts owned by a governmental entity or tax-qualified retirement plan accounts.  Contact your accountant for more details on whether or not you need to file.

These regulations stem from the Bank Secrecy Act which was established to ensure that taxpayers were not hiding income overseas where reporting requirements are more lax.  United States banks have a host of information that they are required to report to the IRS, including interest income and certain large cash transactions.  This information helps the IRS pursue tax evasion and fraud.  Foreign banks, however, do not have the same reporting requirements and in many cases do not even have the same reporting capabilities.  Part of recent revenue raising efforts has been to pursue money that is hidden in these overseas accounts.

Failure to file this form by the June 30, 2011 deadline can result in civil or criminal penalties.  There is no extension process for this form.  If you have any questions or believe you may meet the requirements to file this form, please contact us and we can help!

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