F-Bar - Report of Foreign Bank account

Notice 2009-62 , I.R.B. 2009-35, August 7, 2009.




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The IRS has extended the due date for certain specified persons to file foreign bank account reports (FBARs) (Forms TD F 90-22.1, Report of Foreign Bank and Financial Accounts) for 2008 and earlier calendar years. Citing additional time needed by the Treasury Department to address issues pertaining to FBAR filing requirements and the need to provide administrative relief for specified persons, the IRS has provided that eligible persons have until June 30, 2010, to file FBARS for 2008, 2009 and earlier calendar years. Specified persons are (1) persons with signature authority over, but no financial interest in, a foreign financial account, and (2) persons with a financial interest in, or signature authority over, a foreign commingled fund.





I. Background and Purpose

The Report of Foreign Bank and Financial Accounts, Form TD F 90-22.1 (hereinafter referred to as "FBAR"), provides necessary information for certain governmental agencies. Information on the FBAR may be used in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism. This governmental need for information is balanced with the administrative concerns presented by the filing of the information by U.S. persons.

In October 2008, the IRS revised the FBAR and the accompanying instructions. On June 5, 2009, the IRS issued Announcement 2009-51, 2009-25 I.R.B. 1105, which stated that the IRS is temporarily suspending the filing requirement of the FBAR for those persons who are not U.S. citizens, residents, or domestic entities. On May 6, 2009 and June 24, 2009, the IRS posted questions and answers (Q&As-9 and -43, respectively) on its public website ( www.irs.gov) that provide relief to certain persons who only recently learned of their obligation to file an FBAR by setting forth conditions and procedures for filing Form TD F 90-22.1 by September 23, 2009. More information concerning this relief is available at http://www.irs.gov/newsroom/article/0,,id=210027,00.html. This Notice provides additional administrative relief for (i) persons with no financial interest in a foreign financial account but with signature or other authority over the foreign financial account (hereinafter referred to as "signature authority"), 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 (hereinafter referred to as "foreign commingled funds"). The Department of the Treasury intends to issue regulations clarifying the FBAR filing requirements pertaining to those persons with respect to these foreign financial accounts, and solicits comments related to these FBAR filing requirements in this Notice.



II. Extended Filing Date for Specified Persons



A. Current FBAR Instructions

The current instructions to the FBAR provide, with certain exceptions, that U.S. persons that have signature authority over, but no financial interest in, a foreign financial account are required to file an FBAR. These persons must report the account on an FBAR even if the foreign financial account is reported on an FBAR filed by the owner of the account (or other person that has a financial interest in the account).

The current instructions to the FBAR also provide that a foreign financial account that must be reported on an FBAR includes any bank, securities, securities derivatives, or other financial instruments account. The FBAR instructions further provide that those accounts "generally also encompass any accounts in which the assets are held in a commingled fund and the account owner holds an equity interest in the fund (including mutual funds)."

The current instructions to the FBAR also provide that Form TD F 90-22.1 with respect to a given calendar year must be filed with the Department of the Treasury on or before June 30 of the succeeding year. Thus, except as provided in the prior relief granted by the IRS on its public website and the relief granted in this Notice, FBARs with respect to the 2008 calendar year should have been filed on or before June 30, 2009.



B. Extended Date for Filing an FBAR

In light of the additional time needed for the Department of the Treasury to address issues pertaining to FBAR filing requirements and the need to provide administrative relief for (i) persons with signature authority over, but no financial interest in, a foreign financial account, and (ii) persons with a financial interest in, or signature authority over, a foreign commingled fund, this Notice provides that those persons have until June 30, 2010, to file an FBAR for the 2008 and earlier calendar years with respect to these foreign financial accounts. Thus, eligible persons that avail themselves of the administrative relief provided in this Notice may need to file FBARs for the 2008, 2009 and earlier calendar years on or before June 30, 2010, to the extent provided in future guidance.

The FBAR filing extension provided by this Notice applies to FBARs with respect to 2008 and earlier calendar years. For (i) persons with signature authority over, but no financial interest in, a foreign financial account, and (ii) persons with a financial interest in, or signature authority over, a foreign commingled fund, the FBAR filing extension provided in this Notice supplements the filing extension to September 23, 2009, previously provided by the IRS on its public website.



III. Request for Public Comments

The Department of the Treasury is interested in receiving comments on the following issues affecting a person's FBAR filing obligation.

The Department of the Treasury requests comments regarding when a person with signature authority over, but no financial interest in, a foreign financial account should be relieved of filing an FBAR for the account. For example, comments are requested regarding whether relief from filing would be appropriate if a person with a financial interest in the account has filed an FBAR.

The Department of the Treasury requests comments discussing in what circumstances the exception from FBAR filing currently available for officers and employees of banks and certain publicly-traded domestic companies might be expanded to apply to all officers and employees with only signature authority over, and no financial interest in, an employer's foreign financial account, including circumstances in which an individual has been advised that an FBAR has been filed with respect to a foreign financial account for which that person has signature authority. The Department of the Treasury also requests comments discussing how the bank and publicly-traded company exception (including the requirement of notification that an FBAR was filed by a U.S. person with a financial interest in the account) might apply to officers and employees with only signature authority over accounts owned by clients of their employer.

The Department of the Treasury requests comments concerning when an interest in a foreign entity (e.g., a corporation, partnership, trust, or estate) should be subject to FBAR reporting. For example, comments are requested regarding the possibility of applying the principles of sections 1297 and 1298(b) of the Internal Revenue Code to determine when an interest in a foreign entity should be subject to FBAR reporting. Comments are also requested regarding whether the passive asset and passive income thresholds of 50 percent and 75 percent, respectively, are appropriate and whether the tests should apply conjunctively.

The Department of the Treasury also requests comments on whether a U.S. person should be relieved from an FBAR filing requirement with respect to a foreign commingled fund in other circumstances, such as when filing would be duplicative of other reporting.

Interested persons should submit comments and suggestions with respect to the guidance on FBAR reporting in this Notice by October 6, 2009, to:
Internal Revenue Service

Attn: CC:PA:LPD:PR ( Notice 2009-62)

Room 5203

P.O. Box 7604

Ben Franklin Station

Washington, D.C. 20044

or hand deliver comments Monday through Friday between the hours of 8 a.m. and 4 p.m. to:
Courier's Desk

Internal Revenue Service

Attn: CC:PA:LPD:PR ( Notice 2009-62)

1111 Constitution Avenue, N.W.

Washington, D.C. 20224

A copy of those comments should also be sent to:
Financial Crimes Enforcement Network

Department of the Treasury

P.O. Box 39

Vienna, VA 22183

Alternatively, the public may submit comments electronically via e-mail to the following address: Notice.Comments@irscounsel.treas.gov with a copy to regcomments@fincen.gov. Respondents should include "Notice 2009-62" in the subject line of any comment submitted.

All comments submitted by the public will be made available for public inspection and copying in their entirety.



IV. Effective Date

This Notice applies to FBARs (Form TD F 90-22.1) with respect to calendar year 2008 and prior calendar years.



V. Contact Information

For further information regarding the relief relating to signature authority, contact Terra-Lynn Zentara at (202) 283-7659 (not a toll-free call). For further information regarding foreign commingled funds, contact Joseph Henderson at (202) 622-3446 (not a toll-free call).


Announcement 2009-51 , I.R.B. 2009-25, June 5, 2009.




Reporting requirements: Foreign bank account reports: United States person. --
The IRS is temporarily suspending the requirement to file foreign bank account reports (FBARs) (Forms TD F 90-22.1, Report of Foreign Bank and Financial Accounts) due on June 30, 2009, for persons who are not citizens, residents or domestic entities. Form TD F 90-22.1, which was revised in October 2008, changed the definition of "United States person" and resulted in some confusion that may require additional guidance. Therefore, for FBARs due on June 30, 2009, taxpayers should use the prior (July 2000) version's definition in determining who must file an FBAR. Under that former definition, a "United States person" is (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust. Taxpayers required to file an FBAR due on June 30, 2009, should still file the current version of Form TD F 90-22.1. The substitution of the prior definition of "United States person" applies only with respect to FBARs due on June 30, 2009.



The Internal Revenue Service is temporarily suspending the reporting requirement with respect to foreign bank accounts (Form TD F 90.22-1 (Report of Foreign Bank and Financial Accounts)) due on June 30, 2009, for those persons who are not citizens, residents, or domestic entities. The revised Form TD F 90.22-1 (October 2008) was issued with a change in the instructions to the definition of "United States person." The IRS has received a number of questions and comments from the public concerning the new filing requirement that may require additional guidance.

To reduce the burden on the public with respect to FBARs due on June 30, 2009, all persons may rely on the definition of "United States person" found in the instructions for the prior version of the FBAR (the July 2000 version) to determine whether they have an obligation to file an FBAR. The definition of "United States person" from the prior version is as follows:
United States Person The term "United States person" means (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.

The definition of the term "United States person" from the instructions for the prior version of the FBAR form may be relied upon for purposes of determining who must file an FBAR. All other requirements of the current version of the FBAR form and instructions (revision October 2008) are still in effect. The current version of the form must be used when filing an FBAR.

The substitution of the definition of "United States person" from the instructions for the prior version of the FBAR applies only with respect to FBARs due on June 30, 2009. Additional guidance will be issued with respect to FBARs due in subsequent years.

The Service invites interested persons to submit comments regarding the revised FBAR form and instructions (revision October 2008). Please submit comments by August 31, 2009 to: Internal Revenue Service, CC:PA:LPD:PR (Announcement 2009- 51), room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions also may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (Announcement 2009-51), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue N.W., Washington, DC. Alternatively, taxpayers may submit electronic comments directly to the IRS e-mail address: notice.comments@irscounsel.treas.gov (attention: Announcement 2009-51).

The principal author of this announcement is Adrienne Mikolashek of the Office of Associate Chief Counsel (Procedure and Administration). For further information regarding this announcement contact Adrienne


General Requirement of Return: Foreign bank, securities, and other financial accounts reporting

Corporations with subsidiaries are allowed to file consolidated reports on Form 90-22.1. Individuals who had to file because they have signature authority over a corporate bank account will not be required to file.

Treas. Dept. News Rel. B-797, Mar. 23, 1978, 789 CCH ¶6519.

A special filing procedure applies to persons having a financial interest in 25 or more foreign financial accounts.

Treas. Dept. News Rel. B-394, Aug. 16, 1977, 779 CCH ¶6926K.

Treasury Form 90-22.1 will not be required of persons owning or controlling foreign financial accounts valued at less than $5,000.

IRM 4234, Exhibit 200-4.

Treasury Form TD F 90-22.1 is not required of individuals, partnerships, trusts, or corporations having a financial interest in or authority over one or more bank accounts, securities accounts, or other financial accounts in a foreign country, when such account(s) have an aggregate value in excess of $10,000.

IRM Handbook 9.10, chapter 2.4.3 (rev. 08/99).