Wipfli Alerts & Updates: Foreign Bank Account Reporting June 30th Deadline Approaching

June 6, 2012
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The Bank Secrecy Act of 1970 requires U.S. citizens and residents to report interests in foreign financial accounts or signature authority over foreign financial accounts.  The report, numbered TD F 90-22.1 and titled “Report of Foreign Bank and Financial Accounts”, commonly known as the FBAR, must be received by the U.S. Department of the Treasury  by June 30th.  This deadline is not extendable and is applicable whether the U.S. person is on a fiscal or calendar year.
This report is an informational report that must be filed annually by U.S. persons who have an ownership interest in, or signature authority over, foreign financial accounts whose cumulative value was more than $10,000 at any time during the 2011 calendar year.  The FBAR is required even if the foreign financial account was already reported on a form attached to an individual Form 1040 and may be required even if already reported by someone else with an interest in the same account.  This filing is required in addition to the new filing for U.S. individuals on Form 8938.
Significant penalties exist for the failure to report qualifying foreign financial accounts, such as a $10,000 penalty per violation for the nonwillful failure to report the foreign account. Penalties increase in severity for willful failure to file, including criminal penalties and higher civil penalties.
You should review your investment holdings now to determine whether you are required to file this report. Investments in foreign mutual funds, foreign pension plans, insurance and annuity polices with cash value and foreign bank accounts held by foreign entities owned more than 50% by the U.S. person are all reportable accounts for example.
If you have a financial interest in or signature authority over foreign financial accounts meeting the $10,000 threshold and have not yet filed your FBAR, please contact Stacy Secker, Bob Buetow, or your Wipfli relationship executive.
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