Update: Form 90-22.1 Report of Foreign Bank and Financial Accounts
To Our Clients and Friends:
The purpose of this Alert is to remind you of the 2008 filing requirement for United States Department of the Treasury Form 90-22.1. This form is required if you had a financial interest in or had signature authority over non-United States bank and financial accounts with an aggregate value that exceeded $10,000 at any time during 2008. Form 90-22.1 is filed separately from your income tax returns and must be filed with the Treasury Department no later than June 30, 2009. There is no extension available for filing this form. In addition, the Treasury Department has changed the 2008 form to require disclosure of the actual highest balance during the year for each account(s) as well as the address of each foreign bank or other financial institution where accounts were held.
The Treasury Department will impose a civil penalty of up to $10,000 for any person who does not comply with the filing requirements, regardless of whether the lack of filing is willful or not. More recently, the Obama Administration proposed a substantial increase in the civil penalties for non-filing of the form. Clearly, the federal government intends to be more aggressive in pursuing penalties in this area.
The form is required to be filed by any United States person (including an individual, corporation, partnership, trust or estate) which has a financial interest in or signatory authority over any foreign financial account. United States persons include citizens or residents of the United States and, beginning in 2009, persons in and doing business in the United States (including non-resident aliens).* A financial account includes any bank, securities, securities derivatives, foreign mutual fund or other financial instruments account (including any savings, demand, checking, deposit, or other account maintained with a financial institution).
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 United States person. A financial interest also includes an account held by a corporation in which the United States person owns, directly or indirectly, more than 50% of the total voting power or value of shares; a partnership in which the United States person owns an interest of more than 50% in the capital or profits; or a trust as to which the United States 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 with completing this form or determining whether an individual or organization 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
*Non-resident aliens who visit the United States to manage personal investments and conduct no other business activities generally are not required to file the FBAR.
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 Alert, Frank, Rimerman + Co. LLP is not rendering any specific advice to the reader.