Report of Foreign Bank and Financial Accounts

Do you or your company have a bank account in a foreign country?  If so you may be required to file an information return with the IRS by June 30, 2010.  Failure to do so could result in penalties ranging from $10,000 to $500,000 or even imprisonment.

U.S. persons are required to file a Report of Foreign Bank and Financial Accounts or FBAR (Form TD F 90-22.1) each year if they have a financial interest in any financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.  In addition, a person who has signature authority over a foreign bank or financial account must also file Form TD F 90-22.1.  Accordingly, many U.S. companies that have control over their foreign subsidiaries will be required to file a Report.

The Report of Foreign Bank and Financial Accounts is not an income tax return, and, unlike with federal income tax returns, requests for an extension of time to file a Report are not granted.  If a holder of a foreign account was required to file a Report for earlier years, however, the holder should file the delinquent Reports and attach a statement explaining why the Reports are late. No penalty will be assessed if the IRS determines that the late filings were due to reasonable cause.

If you have any questions, please contact Feeley & Driscoll's Boston Accounting team, Email us or call 1 (888) 875-9770.

Below is a link to Form TD F 90-22.1 and the corresponding instructions.
http://www.irs.gov/businesses/small/article/0,,id=148845,00.html
http://www.irs.gov/pub/irs-pdf/f90221.pdf

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