Foreign Bank Accounting Reporting – Form TD F 90.22.1 – Voluntary Disclosure
June 16, 2011
A New Focus on Foreign Bank Account Reporting
For over 40 years, foreign bank account (FBAR) reporting has been existence. Yet, the IRS has only recently started enforcing taxpayer compliance. With this new IRS focus, we felt it necessary to provide details on how to be compliant.
If you have a financial interest or a signatory authority over a financial account in any foreign country that exceeds $10,000 at any time during a year, you must file Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) with the U.S. Treasury.
What Is a Financial Account?
Many taxpayers have had questions about what exactly constitutes a financial account. The IRS considers accounts deemed to be subject to FBAR to include all liquid assets and marketable securities. Therefore, anything from a cash account or a mutual fund to an exchange traded fund needs to now be reported.
Who Is Responsible for Filing?
If you are a shareholder, partner, or trustee in an account, you may be determined to hold a financial interest in an account and have a filing requirement. If you are unclear, contact Wallace & Associates as soon as possible to find out if you are responsible for filing TD F 90.22.1. The filing deadline is June 30th, and there are no extensions for this form. It is not considered part of your income tax form.
While this form has no current income tax implications, civil and criminal penalties for not filing are significant. At Wallace & Associates, it’s our mission to provide all of your taxation and accounting needs, and have the latest information to keep you compliant and timely with filings. Check back often on the Wall & Associates blog for the latest updates.
Sources: www.irs.gov and www.ftb.ca.gov
