FBAR Question - U.S. Parent, Foreign Sub with Foreign Account

I ask my readers for help on a question of where on the FBAR form for a parent corporation filing the FBAR form to report foreign accounts owned by a foreign subsidiary. We have been struggling with this question and have no answer. Needless to say the IRS FBAR Hotline is impossible (rolls to voice mail boxes, most of which are filled).

The choices are Parts II, III or IV. I have received suggestions from good practitioners that each of these is the proper Part. I picked up the following email published in today's Tax Notes today that adequately expresses the conundrum and, if I get an answer or, in this case, answers, I will post the one or ones that appear most meritorious. In the meantime, I have a telephone call into the author of the email below which says that, upon inquiry (presumably to the IRS but he does not say that), he was told to use Part II.

Any answers or comments can either be posed or emailed to me at jack@tjtaxlaw.com.

FOLLOWING EMAIL PUBLISHED IN TAX NOTES TODAY ON 6/27/09:

From: Martin L. Scheckner [mls@mlscpapa.com]
Sent: 06/26/2009 10:05 AM
To: 'comments@irscounsel.treas.gov'
Subject: Form 90-22.1 request for comments on 90-22.1

Thank you for requesting our comments with respect to the FBAR form. We, and many other practitioners have struggled this year with the changes and extended definitions of accounts. We appreciate the Service's attempts to amplify their explanations of the requirements.

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3. There is currently no way to accurately reflect information where the taxpayer owns a foreign corporation (which is not required to file the FBAR) that has a foreign account. Upon inquiry we have been told to enter the above scenario in Part II as an account "Owned Separately" by the filer, but that is misleading and inaccurate. We suggest adding an additional category where the filer has an financial interest, but no direct ownership in an account.

The current options are:

Part II Financial Accounts Owned Separately
Part III Financial Accounts Owned Jointly
Part IV Financial Accounts Where Filer Has Signature or Other Authority But No Financial Interest

Parts II and III indicate direct ownership of an account, which is not the case in the above situation. Part IV indicates no financial interest, which is incorrect when the filer has an ownership interest in the owner of the account.

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Respectfully Submitted,

Martin L Scheckner CPA and
Marcell Hetenyi CPA

Scheckner & Hetenyi, PL
Certified Public Accountants
2525 Ponce DeLeon Blvd.
5th Floor
Coral Gables, FL 33134
Phone (305) 938-2309 (Direct Line)
Fax (305) 726-2804 (Direct Fax)
mls@mlscpapa.com