IRS Notice 2009-62 Issued 8/7/09
IRS Notice 2009-62 Issued 8/7/09
The due date for reporting the existence of Offshore Bank Accounts on Treasury Department Form TD F 90-22.1 has been an issue of great confusion in the last few months.
Form TD F 90-22.1 is known as Foreign Bank Account Reporting (AKA “FBAR”)
For a complete review of this soap opera of events since June, please see: http://www.groco.com/readingroom/intl_foreign_bank_reporting.aspx
On Friday, 8/7/09, the I.R.S. issued Notice 2009-62 in an attempt to clarify the rules. You can decide if the Notice clarified or confused the issue. I just have trouble (with 29 years of experience and a Masters Degree in Taxation) keeping up with who needs to file what by when.
This morning I discussed this issue with the I.R.S. staff in Washington, D.C. who wrote Notice 2009-62. See: http://www.irs.gov/pub/irs-drop/n-09-62.pdf
THE EXTENSION UNTIL JUNE 30, 2010 in Notice 2009-62 IS ONLY FOR TAXPAYERS UNDER (i) and (ii), below. All others, who “only recently learned” of the need to file the FBARs, have only until September 23, 2009 to file for 2008 and 6 prior years to avoid penalties (if they have already paid the income tax on the foreign account income.)
OK, this is confusing. So here’s a more organized review of the rules:
Taxpayers who filed FBARs in prior years for the same accounts or always knew they needed to file the FBAR: The due date was June 30, 2009. No extension because it was clear and they always knew they needed to file. File as soon as possible.
Taxpayers who “only recently learned” they needed to file, but are not under IRS Notice 2009-62, have a due date to sort it all out and file by September 23, 2009 to avoid FBAR penalties…including any unfiled 6 prior years…unless 4) applies. Follow the filing procedure in Question #9 of the FAQs (link below).
Taxpayers with accounts covered by Notice 2009-62 now have until June 30, 2010 to sort everything out based on IRS further guidance which is “forthcoming” Including any unfiled 6 prior years to avoid penalties…unless 4) applies.
Taxpayers who did not report the income from the accounts (on Form 1040, Schedule B and/or Schedule D & E for individuals – different forms for partnerships, trusts or corporations) get NO extension and need to immediately pursue a voluntary disclosure by September 23, 2009 and suffer both tax penalties and FBAR penalties that will be 7 times worse after September 23rd. The I.R.S. will also strongly consider criminal prosecution of tax evaders who don’t disclose by September 23, 2009.
See: http://www.groco.com/readingroom/tax_unreported_offshore_income.aspxRegarding the Voluntary Disclosure Program.
Well, I’m glad the I.R.S. cleared all that up. Aren’t you?
I.R.S. Notice 2009-62 issue August 7, 2009 says in Sec. B:
“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 a 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.”
Here’s the IRS FAQ with the September 23, 2009 due date info…
http://www.irs.gov/pub/irs-utl/faqs-revised_6_24_checked_v2.pdf
I am always available for questions or comments at (510) 797 8661 x237.
We hope you found this article about “IRS Notice 2009-62 Issued 8/7/09” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Top Tips to Remember When You Can’t Pay Business Taxes
Business taxes can be a nightmare for a lot of companies; especially small businesses that are trying to stay afloat. Things can get even tougher when it comes time to file your return and you end up on the wrong side of the ledger. So what should you do if you end up owing more…
First Half of Current Fiscal Year a Record-Breaker for U.S. Treasury
It’s been another record year for the federal government so far, which is in the midst of its current fiscal year. At the end of March, when the government reached its halfway point of the 2016 fiscal year, it had already collected $1.48 trillion. One might think that this massive haul would help ease the…
Why Is Almost Half the Country Paying no Federal Income Tax?
One of the biggest tax debates that will likely always exist is whether or not the nation’s wealthy are paying enough in taxes? It’s easy for some to argue that they don’t but there are many factors that must be considered. Plus, all the while, nearly half of the country’s would-be taxpayers don’t actually pay…
Where Is Your Paycheck Going?
While many of the nation’s high net-worth individuals make much of their income through capital gains, those who still collect a paycheck are doling out of cash to the IRS every time they get paid. The same is true for all taxpayers no matter what income level they fall in. In fact, according to a…