Thursday, June 16, 2011

Pre-2010 FBAR Filing Extension to 11/1/11 for Signatories Only (6/16/11)

The IRS has previously granted an FBAR filing extension until 6/30/11 for signatories only with respect to foreign accounts. Today, the IRS granted a further extension until 11/1/11. See IRS Notice 2011-54.  The guts of the notice is:

Persons having signature authority over, but no financial interest in, a foreign financial account in 2009 or earlier calendar years for which the reporting deadline was extended by Notice 2009-62 or Notice 2010-23 will now have until November 1, 2011, to file FBARs with respect to those accounts. The deadline for reporting signature authority over, or a financial interest in, foreign financial accounts for the 2010 calendar year remains June 30, 2011.
Readers may be interested in this post from Caplin and Drysdale International Tax Alert: Recent Developments Relating to FBARs and Offshore Voluntary Disclosure Program (June 6, 2011).

1 comment:

  1. This is now the second filing extension for signature-only FBARs for calendar year 2009 or earlier. This means that the 2009 FBAR, for example, was not due June 30, 2010, as originally required, nor June 30, 2011, but rather November 1, 2011.

    Why the leniency for the signature-only FBAR deadline? Surely FBARs for signature-only accounts are important in the global fight against money laundering, criminal activity, etc., which is, according the Government, the motivation behind FBAR reporting. Otherwise signature-only accounts would not come within the FBAR requirement.

    My thought is the extension relates to enforcement and collection of penalties. For FBARs applicable to account owners (as opposed to signatories-only), the IRS could probably more easily go for penalties for willful, or at a minimum, non-willful failure to file. In other words, it would be easier for the IRS to go after a taxpayer who owned a foreign account and did not file an FBAR as to ownership. It would be more difficult to go after a taxpayer whose employer owned a foreign account and the taxpayer/employee merely had a signatory power. The IRS appears to be bending over backwards to give signatories-only a wide opportunity to file the FBARs, while account owners have a much narrower window to be compliant. However, if the FBAR applies to both groups, both should be on equal footing. But enforcement against one group is more lucrative.


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