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IRS Has Announced Limited FBAR Reporting Relief

May 14, 2010

A recent notice (Notice 2010-23) provides some administrative relief to certain persons who may be required to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for calendar year 2009 and earlier calendar years. 

By way of background, each U.S. person (including an individual, corporation, exempt organization, partnership, trust or estate) who has a financial interest in, or signature or other authority over, any foreign financial accounts, must file an FBAR form by June 30, 2010 for calendar year 2009 if the aggregate value of the foreign accounts exceeded $10,000 at any time during calendar year 2009.  A potential $10,000 penalty could be assessed for non-willful violations of this filing requirement.

A financial account includes any bank, securities, securities derivatives or other financial instruments account (including any savings, demand, checking, deposit or other account maintained with a financial institution).  Where assets are held in a commingled fund, such as a mutual fund, an equity interest in the fund is also considered a financial account under the form's current instructions.  However, many significant reporting issues remained unresolved by the IRS, including application to U.S. persons and entities holding interests in foreign partnerships, foreign corporations and other entities holding and/or trading securities. 

On August 31, 2009, IRS published Notice 2009-62, which extended the filing deadline for (i) persons with no financial interest in a foreign financial account, but with signature authority over that account and (ii) persons with a financial interest in, or signature authority over, a foreign financial account in which the assets are held in a commingled fund.  This extension was provided in order for the IRS to have the time to develop the necessary guidance.

Recent Notice 2010-23 provides the following administrative relief:

  • Signature authority - 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. This new deadline applies to FBARs reporting foreign financial accounts over which the person has signature authority, but no financial interest, for the 2010 and prior calendar years.
  • Certain foreign commingled funds - persons with a financial interest in, or signature authority over, a foreign commingled fund that is a mutual fund are required to file an FBAR unless another filing exception, as provided in the FBAR instructions or other relevant guidance, applies.  IRS won't interpret the term "commingled fund" as applying to funds other than mutual funds with respect to FBARs for calendar year 2009 and prior years.  A financial interest in, or signature authority over, a foreign hedge fund or private equity fund is included in this relief.

If you have any questions about the filing requirements or need additional information, please contact Liz Solecki at or 860.561.6875.


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