The Tax Warriors at Drucker & Scaccetti remind you that you are required to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if you had a foreign financial account active in 2012. Remember, this report is required even if the accounts did not produce taxable income.
The FBAR report is an informational form that must be received, for the 2012 reporting year, by the U.S. Treasury Department ("Treasury") on or before June 30, 2013. The fact that this year's the due date falls on a Sunday does not extend the date the form is due to be received by the Treasury. This means you should plan to have your FBAR delivered to the Treasury by Friday, June 28, 2013, to avoid any possible penalties for late filing.
Although the paper form is acceptable for the 2012 reporting year, the Treasury urges you to file electronically. In fact, beginning July 1, 2013, all FBARs must be filed electronically. Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.
Who Must File an FBAR
United States persons are required to file an FBAR if:
- The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- The aggregate value of all foreign financial accounts included in # 1 above exceeded $10,000 at any time during the calendar year to be reported.
A United States person means, in the instant case, United States citizens, residents or entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
Exceptions to the Reporting Requirement
Exceptions to the FBAR reporting requirements can be found in the filing instructions for the FBAR form. Some of these filing exceptions, for the following United States persons or foreign financial accounts, include, but are not limited to:
- Certain foreign financial accounts jointly owned by spouses already reported by the other spouse;
- United States persons included in a consolidated FBAR;
- Correspondent/nostro accounts;
- Foreign financial accounts owned by a governmental entity;
- Foreign financial accounts owned by an international financial institution where the US Government is a member;
- Financial accounts held in an IRA by IRA owners and beneficiaries;
- Financial accounts held in tax-qualified retirement plans by Participants in and beneficiaries of tax-qualified retirement plans;
- Certain individuals with signature authority over but no financial interest in a foreign financial account;
- Trust beneficiaries; and
- Foreign financial accounts maintained on a United States military banking facility.
Special care should be taken to review to the form's instructions to determine eligibility for an exception and to review exception requirements. Feel free to contact us with questions.
The Tax Warriors at Drucker & Scaccetti are uniquely suited to help clients with FBAR and other foreign financial asset reporting. Our global reach through our membership in the Geneva Group International gives our clients peace of mind in knowing we possess international tax expertise as well as access to experts in finance and taxation worldwide.
If you are not sure about how FBAR reporting may impact you or your business, click "Ask A Tax Warrior" below or contact Steve Braun at (215) 665-3960. We are always prepared to help you with this or any other tax, finance or business-related matter.