You Thought FBAR (Foreign Bank Account Report – Form TD F 90-22.1) Was Bad?

You Thought FBAR (Foreign Bank Account Report – Form TD F 90-22.1) Was Bad?

By Ron Cohen, CPA, MST
Partner
Greenstein, Rogoff, Olsen & Co., LLP

PLEASE See: http://www.calcpa.org/Content/26096.aspx

We are happy to help you meet these old & new disclosure requirements. Non-reporting subjects a taxpayer to horrendous penalties, even if no tax is due.

For your info, the new IRS Code Section:

Internal Revenue Code § 6038D Information with respect to foreign financial assets.

In general. Any individual who, during any taxable year, holds any interest in a specified foreign financial asset shall attach to such person’s return of tax imposed by subtitle A for such taxable year the information described in subsection (c) with respect to each such asset if the aggregate value of all such assets exceeds $50,000 (or such higher dollar amount as the Secretary may prescribe).
Specified foreign financial assets.
For purposes of this section, the term “specified foreign financial asset” means—
Any financial account (as defined in section 1471(d)(2) ) maintained by a foreign financial institution (as defined in section 1471(d)(4) ), and
Any of the following assets which are not held in an account maintained by a financial institution (as defined in section 1471(d)(5) )—
Any stock or security issued by a person other than a United States person,
Any financial instrument or contract held for investment that has an issuer or counterparty which is other than a United States person, and
Any interest in a foreign entity (as defined in section 1473 ).
Required information.
The information described in this subsection with respect to any asset is:
In the case of any account, the name and address of the financial institution in which such account is maintained and the number of such accounts.
In the case of any stock or security, the name and address of the issuer and such information as is necessary to identify the class or issue of which such stock or security is a part.
In the case of any other instrument, contract, or interest—
Such information as is necessary to identify such instrument, contract, or interest, and
The names and addresses of all issuers and counterparties with respect to such instrument, contract, or interest.
The maximum value of the asset during the taxable year.
Penalty for failure to disclose.
In general.
If any individual fails to furnish the information described in subsection (c) with respect to any taxable year at the time and in the manner described in subsection (a) , such person shall pay a penalty of $10,000.
Increase in a penalty where failure continues after notification.
If any failure described in paragraph (1) continues for more than 90 days after the day on which the Secretary mails notice of such failure to the individual, such individual shall pay a penalty (in addition to the penalties under paragraph (1) ) of $10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. The penalty imposed under this paragraph with respect to any failure shall not exceed $50,000.
The presumption that the value of specified foreign financial assets exceeds a dollar threshold.
If—
The Secretary determines that an individual has an interest in one or more specified foreign financial assets, and
Such an individual does not provide sufficient information to demonstrate the aggregate value of such assets, then the aggregate value of such assets shall be treated as being in excess of $50,000 (or such higher dollar amount as the Secretary prescribes for purposes of subsection (a) ) for purposes of assessing the penalties imposed under this section.
Application to certain entities.
To the extent provided by the Secretary in regulations or other guidance, the provisions of this section shall apply to any domestic entity which is formed or availed of for purposes of holding, directly or indirectly, specified foreign financial assets, in the same manner as if such entity were an individual.
Reasonable cause exception.
No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause.
Regulations.
The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance which provide appropriate exceptions from the application of this section in the case of—
Classes of assets identified by the Secretary, including any assets with respect to which the Secretary determines that disclosure under this section would be duplicative of other disclosures,
Nonresident aliens, and
Bona fide residents of any possession of the United States.

We hope you found this article about “You Thought FBAR (Foreign Bank Account Report – Form TD F 90-22.1) Was Bad?” 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..

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.