Any U.S. person who had a financial interest or signature authority over any financial account located outside of the U.S. in 2010 is required to file form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts” (FBAR) by June 30, 2011. The filing requirement applies if the aggregate value of those accounts exceeded $10,000 at any time during the calendar year. The form must be received by June 30 – not just mailed by that date. And there are no extensions granted!
The definition of a “financial account” includes a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution. A “financial account” also includes a commodity futures or options account, an insurance or annuity policy with a cash value, and shares of a mutual fund or similar pooled fund.
A “foreign financial account” is a financial account located outside of the U.S., such as an account maintained with a branch of a U.S. bank that is physically located outside of the U.S.
And the definitions go on, and get more complicated. A U.S. person has a “financial interest” in a foreign financial account for which:
1. He is the owner of record or holder of legal title, regardless of whether the account is maintained for the benefit of the U.S. person or for the benefit of another person; or
2. The owner of record or holder of legal title is, among other things, an agent of the U.S. person, a corporation in which the U.S. person owns more than half of the value of the shares, a partnership in which the U.S. person owns more than half of the partnership’s income or capital, or a trust with respect to which the U.S. person has some relationship.
Consult a tax pro on this one — a person required to file an FBAR and who fails to properly file may be subject to a civil penalty of up to $10,000! Willful failure to file may subject you to a civil penalty equal to the greater of $100,000 or 50% of the balance in the account at the time of the violation!!