Foreign Asset Reporting Update: IRS Releases Form 8938, FinCEN Grants FBAR Extension for Some Investment Advisors
In its crusade to rein in foreign asset reporting, the IRS moved closer to implementing a new reporting measure called for by the Foreign Account Tax Compliance Act of 2010. Meanwhile, FinCEN granted an FBAR reporting extension to certain employees of investment advisors.
Draft Form 8938 Released: Statement of Specified Foreign Financial Assets
On May 27, 2011, the IRS released a draft version of the Form 8938, Statement of Specified Foreign Financial Assets. The new form is the progeny of the Foreign Account Tax Compliance Act (“FATCA”), passed by Congress in 2010 to prevent foreign income tax evasion by U.S. taxpayers.
A copy the draft version of Form 8938 is available here.
Effective for tax year 2011 reporting, taxpayers with foreign financial assets valued over $50,000 will be required to file Form 8938 annually. To comply, taxpayers will trace foreign asset income, deductions, and credits from the Form 8938 to where the same are reported on the return. While many individuals will file both FBAR and the Form 8938, some may only need to file one or the other. The IRS has not yet released instructions for Form 8938.
FinCEN Grants FBAR Extension for Employees of Investment Advisors
Shortly after FinCEN Notice 2011-1 extended the FBAR filing deadline for certain signatories, the Treasury Department announced an extension for another subset of signatory filers. FinCEN Notice 2011-2 extends the FBAR filing deadline to June 30, 2012 for the following individuals:
A full copy of Notice 2011-2 is available here.
Individuals and entities that do not fall within the exceptions must file the FBAR for calendar year 2010 by June 30, 2011. The form must be received by June 30th and a USPS postmark will not suffice.
The attorneys at Fuerst Ittleman, PL have extensive experience with the complex regulatory provisions governing the reporting of foreign assets and bank accounts. You can contact an attorney by emailing us at firstname.lastname@example.org.