The Truth About Foreign Bank Account Reporting (FBAR) Requirements and the IRS Voluntary Disclosure Program
If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, then you may be required to report the account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial Accounts (FBAR), if:
1. The person has a financial interest in, or signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country, and
2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad. Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both. The new FBAR instructions (revised in October 2008) contained a change in the definition of “United States person.” Under this new definition, persons can include U.S. citizens or residents, certain foreign persons in and doing business in the United States, domestic corporations, domestic partnerships, domestic estates or domestic trusts.
Since issuing the new FBAR form, the IRS has received a number of questions and comments. On March 23, 2009, IRS issued a memorandum communicating an approved penalty framework for resolving the civil side of offshore voluntary disclosure. This program is effective for 6 months and will expire on September 23, 2009. If you have not filed a FBAR and would like to participate in the voluntary disclosure program, come and learn all about it.
Chinchie Killfoil is the IRS Tax Attache at the U.S. Embassy in Beijing. She will explain the FBAR reporting requirements, U.S. taxpayers’ obligations, and be available to answer questions about how (and why) to make voluntary disclosure.
In November 2008, Chinchie Killfoil became the first IRS Tax Attaché assigned to the U.S. Embassy in Beijing, China. Before coming to China, she served as the Tax Treaty Manager responsible for negotiating transfer pricing cases and resolving tax treaty related disputes with European countries. She interfaced with taxing authorities of the European countries and the executives of the multinational corporations involved.
If you cannot attend the information session at this time, Chinchie will be speaking at HKIS.
Wednesday, September 16th, 6:30 PM,
2nd Floor Seminar Room, New Building
Middle School Campus, 700 Tai Tam Reservoir Road, Tai Tam
The speaker will be:
