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Any tax information or written tax advice contained herein (including any attachments) is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. (The foregoing legend has been affixed pursuant to the U.S. Treasury Regulations governing tax practice.)
The matters highlighted on this website are presented in general terms and cannot be applied without consideration of all circumstances. NSBN will provide additional details upon request and will be pleased to discuss with our clients or their attorneys the possible effects of these matters in specific situations.
Email Alert
Update: The Report of Foreign Bank and Financial Accounts Form TD F 90-22.1
July 1, 2009
The Report of Foreign Bank and Financial Accounts - TD F 90-22.1 ("FBAR Form") is required to be filed by U.S. persons that have a financial interest in, or signature or other authority over, a foreign financial account(s) if the aggregate value of the account(s) exceeds $10,000 at any time during a calendar year. For 2008, this form was due by June 30, 2009.
Until recently, the IRS had not given any indication that interests in hedge funds or private equity funds constitute "foreign financial accounts" for purposes of the FBAR Form. Within the last two weeks however, representatives of the IRS informally stated that interests in foreign funds may constitute "foreign financial accounts" for these purposes. If the IRS formally adopts this broad position, U.S. investors (including U.S. tax-exempt investors) in foreign hedge funds as well as private equity funds may be required to file the FBAR Form with respect to these investments.
On June 24, 2009, the IRS announced that the following persons have until September 23, 2009 to file FBAR Forms without the imposition of penalties if they have recently learned of their filing obligations and did not have sufficient time to gather the necessary information to complete the FBAR Forms by the original June 30, 2009 deadline:
a) any taxpayer that reported and paid tax on all of its 2008 taxable income; and
b) any U.S. person that has an obligation to file an FBAR Form for a foreign financial account if all of the 2008 taxable income with respect to that account is timely reported.
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