Form 90-22.1
Report of Foreign Bank and Financial Accounts (FBAR)

To Our Clients and Friends,

The purpose of this Alert is to remind you of the requirement to file the 2009 United States (U.S.) Treasury Department Form 90-22.1 for non-U.S. bank and financial accounts if the aggregate value of the financial account(s) exceeds $10,000 at any time during the year.

The form generally is required to be filed by any U.S. person which has a financial interest in or signatory authority over any foreign financial account.

Form 90-22.1 is filed separately from your other tax returns and must be received by the Treasury Department no later than June 30, 2010. Treasury has extended the filing deadline to June 30, 2011 to report those foreign financial accounts for which the U.S. person has "signature or other authority," but has no financial interest.

The Treasury Department requires U.S. persons to report the actual highest balance for any account(s) during the year and the actual address of the foreign bank or other financial institution. There is more limited reporting for those owning a direct interest in 25 or more foreign bank and financial accounts. The Treasury Department will impose a civil penalty of up to $10,000 for any person who does not comply with the filing requirements, even if the lack of filing is non-willful. For a willful violation, the penalty can be as high as the greater of $100,000 or 50% of the amount in the foreign account.

U.S. persons include a citizen or resident of the U.S., as well as a U.S. corporation, partnership, trust or estate. Treasury has suspended the FBAR reporting for years prior to 2010 for persons "in and doing business in the U.S." who are not U.S. citizens, U.S. residents, or domestic entities.

A financial account includes any bank, securities, derivatives, foreign mutual fund, or other financial instruments account (including any savings, demand, checking, deposit, annuities, life insurance contract or other account maintained with a financial institution). The IRS has suspended the reporting of offshore commingled funds such as hedge funds and private equity funds for 2009 and prior tax years, but continues to require filings for foreign mutual funds.

A financial interest in an account includes being the owner of record or having legal title, even if acting as an agent, nominee, or in some other capacity on behalf of a U.S. person. A U.S. person also has a financial interest in an account held by a corporation in which the U.S. person owns, directly or indirectly, more than 50% of the total voting power or value of shares; a partnership in which the U.S. person owns an interest of more than 50% in the capital or profits; or a trust as to which the U.S. person has a present beneficial interest in more than 50% of the assets or receives more than 50% of the current income.

You may contact a Frank, Rimerman + Co. LLP tax professional for assistance completing this form or determining whether an individual or entity is required to file it. If you are required to file, we recommend that you file the form via U.S. Certified Mail, Return Receipt Requested.

Frank, Rimerman + Co. LLP

Any tax advice in this communication is not intended or written by Frank, Rimerman + Co. LLP to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein. With this communication, Frank, Rimerman + Co. LLP is not rendering any specific advice to the reader.

Download Form 90-22.1 Report of Foreign Bank and Financial Accounts (FBAR)
- May 27, 2010 Article