Complex FBAR Questions and other Foreign Asset Reporting
Transcript Of Complex FBAR Questions and other Foreign Asset Reporting
Complex FBAR Questions and other Foreign Asset
Reporting Pitfalls: Plethora of Forms
Kate Leonard, Hutchinson and Bloodgood LLP Narelle MacKenzie, International Tax Consultant Jon P. Schimmer, Procopio, Cory, Hargreaves & Savitch LLP Neil A.J. Sullivan, International Tax Compliance Strategy
Agenda
Is FACTA an Issue for Corporations? FBAR – Who Must File? FBAR – Modified Reporting for Expatriates FBAR – Exceptions to Reporting FBAR – Exception for Consolidated FBAR FBAR – Exception for Officers/Employees of Corporations Questions Disclaimer Notes on Speaker
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Is FACTA an ISSUE?
• (Different rules for Corporations?)
IS FACTA an ISSUE for CORPORATIONS?
• Currently Form 8938 is only required for individuals. • The instructions for Form 8938 note that the IRS expects to be issuing
regulations for specified domestic corporations • Stay tuned for future developments in this area!
FBAR – WHAT IS REQUIRED?
FOR THE CORPORATION AND THE OFFICERS/EMPLOYEES OF THE CORPORATION
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FBAR – WHO MUST FILE?
• Any United States person* is required to file an FBAR if: 1. The United States person had a financial interest in or signature authority over at least one
financial account located outside of the United States; and 2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the
calendar year to be reported.
• *A United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
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FBAR – MODIFIED REPORTING FOR EXPATRIATES
•A United States person who 1.resides outside of the United States, 2.is an officer or employee of an employer who is physically located outside of the United States, and 3.has signature authority over a foreign financial account that is owned or maintained by the individual's employer.
•Only complete Part I and Part IV, Items 34-43 of the FBAR. (Part IV, Items 34-43 should only be completed once with information about the employer.)
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FBAR – Exceptions to REPORTING
• Exceptions to the filing requirements for the following United States persons or foreign financial accounts:
• United States persons included in a consolidated FBAR (see slide 9); • Correspondent/nostro accounts (only used by banks with each other); • Foreign financial accounts owned by a governmental entity; • Foreign financial accounts owned by an international financial institution
(if the United States Government is a member); and • Certain individuals with signature authority over but no financial interest
in a foreign financial account (see slides 10-12).
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FBAR – Exception FOR CONSOLIDATED FBAR
• An entity that is a United States person that owns directly or indirectly a greater than 50 percent interest in another entity that is required to file an FBAR is permitted to file a consolidated FBAR on behalf of itself and such other entity. (Check box “d” in Part I, Item 2 and complete Part V.)
• If filing a consolidated FBAR and reporting 25 or more foreign financial accounts, complete only Items 34-42 for each entity included in the consolidated FBAR.
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Reporting Pitfalls: Plethora of Forms
Kate Leonard, Hutchinson and Bloodgood LLP Narelle MacKenzie, International Tax Consultant Jon P. Schimmer, Procopio, Cory, Hargreaves & Savitch LLP Neil A.J. Sullivan, International Tax Compliance Strategy
Agenda
Is FACTA an Issue for Corporations? FBAR – Who Must File? FBAR – Modified Reporting for Expatriates FBAR – Exceptions to Reporting FBAR – Exception for Consolidated FBAR FBAR – Exception for Officers/Employees of Corporations Questions Disclaimer Notes on Speaker
Page 4 6 7 8 9 10 13 14 15
2
Is FACTA an ISSUE?
• (Different rules for Corporations?)
IS FACTA an ISSUE for CORPORATIONS?
• Currently Form 8938 is only required for individuals. • The instructions for Form 8938 note that the IRS expects to be issuing
regulations for specified domestic corporations • Stay tuned for future developments in this area!
FBAR – WHAT IS REQUIRED?
FOR THE CORPORATION AND THE OFFICERS/EMPLOYEES OF THE CORPORATION
5
FBAR – WHO MUST FILE?
• Any United States person* is required to file an FBAR if: 1. The United States person had a financial interest in or signature authority over at least one
financial account located outside of the United States; and 2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the
calendar year to be reported.
• *A United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
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FBAR – MODIFIED REPORTING FOR EXPATRIATES
•A United States person who 1.resides outside of the United States, 2.is an officer or employee of an employer who is physically located outside of the United States, and 3.has signature authority over a foreign financial account that is owned or maintained by the individual's employer.
•Only complete Part I and Part IV, Items 34-43 of the FBAR. (Part IV, Items 34-43 should only be completed once with information about the employer.)
8
FBAR – Exceptions to REPORTING
• Exceptions to the filing requirements for the following United States persons or foreign financial accounts:
• United States persons included in a consolidated FBAR (see slide 9); • Correspondent/nostro accounts (only used by banks with each other); • Foreign financial accounts owned by a governmental entity; • Foreign financial accounts owned by an international financial institution
(if the United States Government is a member); and • Certain individuals with signature authority over but no financial interest
in a foreign financial account (see slides 10-12).
9
FBAR – Exception FOR CONSOLIDATED FBAR
• An entity that is a United States person that owns directly or indirectly a greater than 50 percent interest in another entity that is required to file an FBAR is permitted to file a consolidated FBAR on behalf of itself and such other entity. (Check box “d” in Part I, Item 2 and complete Part V.)
• If filing a consolidated FBAR and reporting 25 or more foreign financial accounts, complete only Items 34-42 for each entity included in the consolidated FBAR.
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