It’s here again and it’s never going away. The annual FBAR filing date.
This year June 30, 2013.
The federal government loves to receive this birthday gift of the filings of FBAR.
In the last three filing seasons the federal government collected over $5.5 billion on Fbar alone and the federal government feels there are over $300 billion more to collect and they are on a diligent hunt to collect all the money that’s out there that they feel belongs to them.
It is in anyone’s best interest who is required to file to make sure they file this report timely because the IRS and the federal government are not going the way away and the fear of criminal prosecution is looming large over those who have yet to make a decision.
Being a former IRS agent and not trying to put fear in anybody, I would suggest anyone who has yet to file, to contact our office today for free tax consultation about their  particular facts and situation and find out the different solutions available to them and about the abatement of penalties and interest.
If you are required to file you MUST file by June 30, 2013.
Who has File?
U.S. persons having a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account may be required by the Bank Secrecy Act to report their interest in the account to the IRS by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).
A U.S. person may have a reporting obligation even though the foreign financial account does not generate any income.
If a U.S. person had such a financial interest or signature authority at any time during calendar year 2012, the FBAR must be received by the Department of the Treasury on or before June 30, 2013.
The FBAR is not filed with the federal income tax return. The granting by the IRS of an extension to file federal income tax returns does not extend the due date for filing an FBAR. The June 30th filing date may not be extended.
FBAR filers report their foreign accounts by (1) completing boxes 7a and 7b on Form 1040 Schedule B; box 3 on the Form 1041 “Other Information” section; box 10 on Form 1065 Schedule B; or boxes 6a and 6b on Form 1120 Schedule N and filing the FBAR, satisfies the account holder’s reporting obligation.
Even if all relevant information is not available, the FBAR should be filed with as much information as is available; the FBAR can be later amended (by checking the “Amended” box in the upper right corner of the first page of the FBAR) when the additional or new information becomes available.
 
Having Financial Interest
A United States person having a financial interest in or signature authority over a foreign financial account must file an FBAR if the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
A United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the U.S. or under the laws of the U. S.; and trusts or estates formed under the laws of the United States.
The term PERSON
The term “person” means an individual and legal entities including, but not limited to, a limited liability company, corporation, partnership, trust, and estate. A U.S. resident includes an alien residing in the United States.
To determine whether the U.S. person is a resident of the U.S., look for guidance in the residency tests set forth in 26 U.S.C. §7701(b).
A single-member LLC, which is a disregarded entity for U.S. tax purposes, is a U.S. person for FBAR filing purposes since the tax rules concerning disregarded entities do not apply with respect to the FBAR reporting requirement (FBARs are required under Title 31, not under any provisions of the Internal Revenue Code).
 
Financial Account.
A financial account includes, but is not limited to, a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution).
A financial account also includes a commodity futures or options account, an insurance policy with a cash value such as a whole life insurance policy, an annuity policy with a cash value, and shares in a mutual fund or similar pooled fund i.e., a fund that is available to the general public with a regular net asset value determination and regular redemption’s.
 
Foreign Financial Account.
A foreign financial account is a financial account located outside of the United States. For example, an account maintained with a branch of a United States bank that is physically located outside of the United States is a foreign financial account.
An account maintained with a branch of a foreign bank that is physically located in the United States is not a foreign financial account.
 
Foreign Country
A “foreign country” includes all geographical areas outside the United States, the commonwealth of Puerto Rico, the commonwealth of the Northern Mariana Islands, and the territories and possessions of the United States (including Guam, American Samoa, and the United States Virgin Islands).
Financial Interest. A U.S. person has a financial interest in a foreign financial account for which:
(1) the U.S. person is the owner of record or holder of legal title, regardless of whether the account is maintained for the benefit of the U.S. person or for the benefit of another person; or
(2) the owner of record or holder of legal title is one of the following:
(a) An agent, nominee, attorney, or a person acting in some other capacity on behalf of the U.S. person with respect to the account;
(b) A corporation in which the U.S. person owns directly or indirectly: (i) more than 50 percent of the total value of shares of stock or (ii) more than 50 percent of the voting power of all shares of stock;
(c) A partnership in which the U.S. person owns directly or indirectly: (i) an interest in more than 50 percent of the partnership’s profits (e.g., distributive share of partnership income taking into account any special allocation agreement) or (ii) an interest in more than 50 percent of the partnership capital;
(d) A trust of which the U.S. person: (i) is the trust grantor and (ii) has an ownership interest in the trust for U.S. federal tax purposes [See 26 U.S.C. § 671-679 to determine if a grantor has an ownership interest in a trust];
(e) A trust in which the U.S. person has a greater than 50 percent present beneficial interest in the assets or income of the trust for the calendar year, unless the trust, a trustee of the trust, or agent of the trust:
(f) is a U. S. person and (ii) files an FBAR disclosing the trust’s foreign financial accounts.; or
(g) Any other entity in which the U.S. person owns directly or indirectly more than 50 percent of the voting power, total value of equity interest or assets, or interest in profits.
Signature Authority.
Signature authority is the authority of an individual (alone or in conjunction with another individual) to control the disposition of assets held in a foreign financial account by direct communication (whether in writing or otherwise) to the bank or other financial institution that maintains the financial account.
Other authority exists in a person who can exercise power that is comparable to signature authority over an account by direct communication to the bank or other person with whom the account is maintained, either orally or by some other means.
There are specified exceptions to the “signature authority only” filing requirement for officers or employees of certain types of banks and entities.
 
Where to File.
The FBAR is filed by mailing to: Department of the Treasury, Post Office Box 32621, Detroit, MI 48232-0621.
If an express delivery service is used, file by sending the FBAR to:
IRS Enterprise Computing Center ATTN: CTR Operations Mail room, 4th Floor, 985 Michigan Avenue, Detroit, MI 48226.
Delivery messenger service contact telephone number: (313) 234-1062.
The FBAR instructions indicate that it may be hand delivered to any local office of the IRS for forwarding to the Department of the Treasury, Detroit, MI.
The FBAR may also be delivered to the IRS’s tax attaches located in United States embassies and consulates for forwarding to the Department of the Treasury, Detroit, MI.
The FBAR is not considered filed until it is received by the Department of the Treasury in Detroit, MI.
It is interesting to note that a recent study done by the GAO office of the federal government has found  for every one dollar the federal government spends on an employee working Fbar it collects six, so it is no wonder you’re going to find much manpower camping in these programs.
Contact us today for free initial tax consultation and speak to a true tax professional