Foreign Bank Account ReportingPosted on February 9 2011 by admin
Severe penalties to the tune of $10,000 and up as well as unclear requirements have prompted additional guidance on foreign bank account reporting. Proposed regulations were issued on February 26, 2010, but won’t go into effect until they are finalized. Until then, the IRS has issued a few notices and announcements for 2009 and 2010.
Taxpayers who have signature authority over, but no financial interest in a foreign bank account now have until June 30, 2011 to report their authority over foreign accounts in calendar year 2010 and prior calendar years. The IRS has also issued relief for certain foreign commingled funds. Interest in private investment vehicles, like private equity funds and hedge funds, will not be considered foreign financial accounts and are not required to be reported for 2009 or prior years. There has been no word on whether these funds will be required to be reported in 2010 and future years.
Accounts that are reportable on Form 90-22.1 include bank accounts, securities accounts, insurance policies with a cash value or annuity policy, and other accounts maintained with a foreign financial institution. If you own or have legal title over a foreign bank account, or have more than a fifty percent ownership in a corporation, partnership, or trust that has financial interest in a foreign bank account, then you must report this ownership. In addition to owning 50% or more of a trust, if you are a mere beneficiary who receives greater than 50% of the distributions, then you are required to file the 90-22.1. The IRS is strongly focusing on enforcement of foreign bank account reporting, so be sure to check with your tax advisor if you are unsure of your filing requirements.
Jill A. Helm, CPA
There is nothing more complex than the world of taxes. We know this and yet we chose careers where we face these issues everyday. We get questions day in and day out about new tax laws, forms and news items and how they affect everyday people and businesses. Well, here at Henry & Horne we have set out to do what we do best; help everyday people understand what is going on in the world of state, local, federal, estate and international taxation. We will provide these weekly posts and we encourage you to give us feedback on those posts as well as letting us know what else you would like to know more about. Welcome to "Tax Insights." We hope you find this blog informative and worthy of your time.
Before posting a comment on a blog post please be aware that we do not give free tax advice to non-clients by email, comment response, or phone. Thank you!
- Those Darn Kids – Millennials and Credit Cards
- Scam Alert! Fake IRS Bills Say You Owe Even More
- Surviving Recruiting: Land the Job and Keep Your Sanity
- Government Forgives Certain Student Loan Debts
- An Easier, Cheaper 60 Day Rollover Waiver
- Hardship Distributions
- Transfer Pricing, IRC 482 and Control
- Taking on the Tax Court – What Happened to Bruno?
- Sales Tax Audits
- Fiduciary Access to Digital Assets and Accounts