Starting in 2011, those taxpayers with foreign bank accounts and/or direct holders of foreign investments will have to file another informational tax form. This Form will be attached to their Form 1040, and does not replace the FBAR Form that many taxpayers have already been filing to report their holdings in foreign bank accounts, foreign life insurance, and certain foreign pensions.
Notice 2011-55 suspends the requirement to attach Form 8938 to income tax returns that are filed before the release of Form 8938. Once the Form 8938 is released, such individuals for whom the suspension applied will be required to attach Form 8938 for the suspended tax year to their next income tax or informational return.
The suspension will have the affect of extending the statute of limitations. The new statute of limitations for this Form will not expire before three years after the date that the IRS receives Form 8938.
Failure to file the suspended Form 8938 with the appropriate tax return may result in the assessment of penalties.
The above information is general in nature and an advisor should be contacted to determine an individuals proper reporting obligations.
By Debra Callicutt, CPA