Towards the end of 2010 and into 2011, the IRS has adopted new measures to close in on foreign financial information disclosure and to focus on IRS tax on foreign incomes.
These measures include the amending of the Bank Secrecy Act through new regulations by the Financial Crimes Enforcement Network (FinCEN) and the revision of the foreign accounts reporting form (Form TD F 90-22.
1).
Below are some basic information on the new Foreign Bank and Financial Accounts Report (FBAR ) Form and the groups affected by these new reporting rules and the processes of reporting: The Form TD F 90-22.
1 Foreign Bank and Financial Accounts Report (FBAR ) The Form TD F 90-22 provides details to IRS concerning foreign financial accounts run by U.
S.
citizens and residents.
The report is part of the accountability documents that ensures that American citizens running foreign business or having foreign accounts pay the due taxes to the U.
S.
government.
The form is straight-forward and includes various details about these foreign accounts.
People and Entities that Need to Fill the Form The (FBAR ) form is to be filled by every U.
S.
citizen, U.
S.
resident, U.
S.
legal entity, U.
S.
trust, and U.
S.
administered estate that have interests in foreign accounts or are bank signatories to such accounts.
An account also needs to have had a balance of $10,000 or above at any point within the material financial year to qualify for reporting.
For the purpose of FBAR, a financial interest includes account ownership, whether direct or indirect, majority right over the foreign account, or control over account through a trust, partnership, or corporation.
These foreign financial accounts include all checking accounts, time deposits, futures and options, securities and brokerage accounts, life insurance policies and annuity with a cash value, and mutual or pooled investment accounts.
For one to report under the FBAR, the foreign account needs to located outside U.
S.
Exemptions to FBAR Certain people are exempted from filling FBAR, even if they qualify under the aforementioned guidelines.
These include non-grantor trust beneficiaries and IRA and qualifying tax exempt retirement plan beneficiaries or owners.
If married partners run a joint qualifying foreign account, they can fill out a single FBAR form.
Procedure of Filing Report The FBAR form needs to be filled and submitted by June 30th of the previous year.
However, with regards to 2010, they have needed to be submitted by March 25th.
The form is to be mailed to the U.
S.
Department of the Treasury.
Failure to remit the form in time may attract both civil and criminal liabilities and penalties.
These measures include the amending of the Bank Secrecy Act through new regulations by the Financial Crimes Enforcement Network (FinCEN) and the revision of the foreign accounts reporting form (Form TD F 90-22.
1).
Below are some basic information on the new Foreign Bank and Financial Accounts Report (FBAR ) Form and the groups affected by these new reporting rules and the processes of reporting: The Form TD F 90-22.
1 Foreign Bank and Financial Accounts Report (FBAR ) The Form TD F 90-22 provides details to IRS concerning foreign financial accounts run by U.
S.
citizens and residents.
The report is part of the accountability documents that ensures that American citizens running foreign business or having foreign accounts pay the due taxes to the U.
S.
government.
The form is straight-forward and includes various details about these foreign accounts.
People and Entities that Need to Fill the Form The (FBAR ) form is to be filled by every U.
S.
citizen, U.
S.
resident, U.
S.
legal entity, U.
S.
trust, and U.
S.
administered estate that have interests in foreign accounts or are bank signatories to such accounts.
An account also needs to have had a balance of $10,000 or above at any point within the material financial year to qualify for reporting.
For the purpose of FBAR, a financial interest includes account ownership, whether direct or indirect, majority right over the foreign account, or control over account through a trust, partnership, or corporation.
These foreign financial accounts include all checking accounts, time deposits, futures and options, securities and brokerage accounts, life insurance policies and annuity with a cash value, and mutual or pooled investment accounts.
For one to report under the FBAR, the foreign account needs to located outside U.
S.
Exemptions to FBAR Certain people are exempted from filling FBAR, even if they qualify under the aforementioned guidelines.
These include non-grantor trust beneficiaries and IRA and qualifying tax exempt retirement plan beneficiaries or owners.
If married partners run a joint qualifying foreign account, they can fill out a single FBAR form.
Procedure of Filing Report The FBAR form needs to be filled and submitted by June 30th of the previous year.
However, with regards to 2010, they have needed to be submitted by March 25th.
The form is to be mailed to the U.
S.
Department of the Treasury.
Failure to remit the form in time may attract both civil and criminal liabilities and penalties.