Report of Foreign Bank and Financial Accounts – June 30, 2009
THE FLORES LAW FIRM
Business & Tax Attorneys
Report of Foreign Bank and Financial Accounts
Dear Clients and Friends,
The purpose of this letter is to inform you of the filing requirements for non-US bank and financial accounts for 2008.
If you have ownership or signature authority in a foreign bank account, or foreign financial account, you may be subject to filing requirements with the Treasury Department. Treasury Department Form 90-22.1 details information concerning foreign bank account ownership and/or signature authority for financial accounts in a foreign country with an aggregate value exceeding $10,000 any time during the calendar year.
Form 90-22.1 is filed separately from your tax returns. If you have already separately filed Form 90-22.1, you should ignore this letter.
The American Jobs Creation Act of 2004 imposes a civil penalty of up to $10,000 on any person who does not comply with the filing requirements, regardless of whether the lack of filing is willful or not.
More recently, the IRS sued the Swiss financial institution UBS in order to compel UBS to release the names of over 50,000 US citizens with Swiss bank accounts.
Additionally, on May 4, 2009, 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 about pursuing penalties in this area.
The IRS has changed the Form for the 2008 tax year. Accordingly, if you would like assistance completing this form, please contact us as soon as possible. The deadline for filing is June 30, 2009.
If you are required to file, we very strongly urge you to file the Form via US Certified Mail, return receipt requested. US Certified Mail is a proof of delivery that the IRS and the US court system accept. FedEx does not constitute legal proof of delivery. A simple postmark also does not constitute legal proof of delivery.
Foreign Account Non-Disclosure Amnesty Program
The IRS has announced an amnesty program that applies to prior tax years. There are two categories of amnesty filers.
1) If you a) were required to file Form 90-22.1 and have not filed, but b) did include all foreign account investment income in your US tax return(s), then there is no penalty for filing the prior years Form(s) 90-22.1. However, in order to avoid any penalty in this case, you must file all delinquent Forms 90-22.1 by September 23, 2009.
2) If you were required to File Form 90-22.1, did not file it, and did not include your foreign investment income in your US tax return(s), then there is a special amnesty procedure. You should contact us immediately if you are in this category.
Should you have any questions whatsoever regarding the foreign financial account filing requirements, please contact us at your earliest convenience.
This information is a presentation of the general rules and should not be used or relied upon for any particular investment or transaction. We recommend you consult your tax attorney or advisor for your specific situation. If you would like more information on these matters we would be glad to visit with you.
As required by United States Treasury Regulations, you should be aware that this communication is not intended or written by the sender to be used, and it cannot be used, by any recipient for the purpose of avoiding penalties that may be imposed on the recipient under United States federal tax laws. For more information contact us at: