June 30th is the Foreign Bank Account Report Deadline
We would like to remind our readers that the deadline for filing a Report of Foreign Bank and Financial Accounts (FBAR) is approaching and the taxpayers should file their FBAR forms (Form TD F 90-22.1) for the 2011 tax year no later than June 30, 2012.
Who Is Required to File
Any United States person, with few exceptions, who has a financial interest in, or signature authority or other authority over, any foreign financial account(s) in a foreign country, with the aggregated value of these accounts exceeding $10,000 at any time during the calendar year, must file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. Foreign financial accounts include, but are not limited to, a checking/savings bank account, brokerage account, mutual fund, trust or other type of foreign financial account.
What Needs to Be Reported
Form TD F 90-22.1 requires the following information:
- Personal information (name, address and Social Security number)
- Maximum value of the account during the calendar year;
- Type of account (i.e., bank, securities, etc.);
- Name of financial institution;
- Account number, and;
- Mailing address of financial institution.
The IRS defines maximum account value as the largest amount that appear on any quarterly or more-frequently issued account statement during the tax year.
Penalties for Failure to File FBARs
Although the FBAR form is an information return and it does not impose any tax by itself, failure to file this report may result in significant civil and criminal penalties. Civil penalties range from $500 to 50% of the account value, per violation, depending on whether such failure to file was willful. Criminal penalties range from $10,000 to $500,000, including incarceration of up to 10 years.
Recent focus of the IRS and U.S. government on offshore accounts makes it even more important for taxpayers with foreign financial accounts to consult with tax an experienced tax attorney and/or accountant and determine their filing obligations.
Former IRS Tax Attorneys of Holtz, Slavett & Drabkin are available to assist you with the issues related to offshore assets and foreign accounts. To arrange for a consultations, please contact us at (310) 550-6200.
Copyright (c) 2012 Igor S. Drabkin. All Rights Reserved.