IRS Says Taxpayers Should Review Revised FBAR Instructions When Preparing Income Tax Returns
In Notice 2011-31, available here, the IRS stated that beginning on March 28, 2011, “the recently published final FBAR regulations will be effective, and should be referenced, along with the revised FBAR form and instructions, when answering foreign financial account-related questions on 2010 tax and information returns.” We previously blogged about the changes to the regulations; see here.
The guidance came on the very same day that the Treasury Department released the new FBAR and instructions. The instructions clarify issues such as who must file the form and when and where the form must be filed. Of particular note is that the FBAR form is due on June 30th, whereas personal income tax returns are due on April 15th.
Under the new guidance, the Department of the Treasury reiterated that “signature or other authority” means the authority to control the disposition of assets in a financial account by “direct communication” to the person or persons with whom the account is maintained. Importantly, if a U.S. bank acts as a “global custodian” and holds a customer’s assets offshore in an global account, that customer would not have to file an FBAR.
The attorneys at Fuerst Ittleman, PL have extensive experience in addressing foreign account compliance, income tax compliance, and IRS audits. You can contact an attorney by emailing us at firstname.lastname@example.org.