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Did you know that you if you have a foreign account, or signature or other authority over a foreign account you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR)?
Who has to file an FBAR, Report of Foreign Bank and Financial Accounts form number TD F 90-22.1?
Any United States person which includes a citizen or resident of the United States, a domestic partnership, a domestic corporation, and a domestic estate or trust who has a financial interest in or signature authority or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.
A single-member LLC, which is a disregarded entity for U.S. tax purposes is considered a United States person for FBAR purposes. The tax rules concerning disregarded entities do not apply with respect to the FBAR reporting requirement.
What constitutes signature or other authority over an account?
A person has signature authority over an account if the person can control the disposition of money or other property in it by delivery of a document containing his or her signature (or his or her signature and that of one or more other persons) to the bank or other person with whom the account is maintained. Other authority exists if a person who can exercise power that is comparable to signature authority over an account by direct communication to the bank or other person with whom the account is maintained, either orally or by some other means.
When is the FBAR due?
The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold. The granting, by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR. Filers cannot request an extension of the FBAR due date, however, persons with signature authority over, but no financial interest in, a foreign financial account for which an FBAR would otherwise have been due on June 30, 2010, will now have until June 30, 2011, to report those foreign financial accounts.
Contact us or visit the IRS website for more information on filing the FBAR.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.