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The Amper Tax Group wants to alert and remind you of the requirement to file Foreign Bank and Financial Account Report (or "FBAR") by June 30th of this year. There is no opportunity to extend the filing of this form. This form is not part of your income tax return, it is a filing separate and apart from your income tax return.

Recently the IRS has beefed up the focus on FBAR compliance. Civil penalties of up to $10,000 per violation may be imposed for any person who does not comply with these requirements, even if the lack of filing was non-willful. Penalties for willful violations can be as high as $100,000, or 50% of the value of the amount in the foreign account at the time of the violation, criminal violations can result in additional fines and even imprisonment. The Obama Administration has looked into increasing these penalties. It is clear that the Federal Government intends to be very aggressive in policing the filing of this form.

If you think you may have had an FBAR filing requirement for prior years with which you did not comply, you may be able to take advantage of a current voluntary disclosure program in effect with the IRS. Please call Amper to discuss.

Who is required to file the FBAR form ?

All "U.S. persons" that during the year have an interest in or signature authority over one or more foreign financial accounts with an aggregate value in excess of $10,000 at any time during the calendar year, are required to file an FBAR on or before June 30th of the following year.

Specifically, FBAR filings for the year 2008, for those "U.S. persons" with more than $10,000 in foreign financial accounts is due no later than June 30, 2009. The form is filed with the U.S. Treasury Department in Detroit, Michigan.

When trying to determine if this filing pertains to you or your business you should pay close attention to the definition of "U.S. person" and "financial account".

As announced by the IRS on June 5th, a U.S. person means: "(1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust"

You may be aware that the revised FBAR has expanded the definition of "U.S. persons" to nonresidents of the U.S. with effectively connected U.S. business. As of June 5th, 2009 the IRS announced that due to the lack of guidance in this area and to reduce the burden on the public for the current filing this June, individuals may rely on the definition of "U.S. person" as stated in the June 5th announcement.

What is a financial account?

The term "financial account" means more than just foreign bank and foreign securities accounts. It is expanded to include mutual funds as well as debit and prepaid credit card accounts, annuities and possibly other financial instruments.

What is an indirect ownership of a financial bank account?

Indirect ownership of a foreign financial account qualifies as an interest, and typically arises when a U.S. person owns directly or indirectly more than 50 percent of a foreign subsidiary, has more than a 50 percent profits interest in a foreign partnership, receives more than 50 percent of the income of a foreign trust and is the beneficiary of more than 50 percent of the assets of a foreign trust, among others.

Be aware:

There are wrinkles to be aware of, in terms of valuation, who is required to file the FBAR, and who has control over an account. For instance, foreign currency is converted by using the official exchange rate at the end of the year, while the value of stock or other non-monetary assets in an account reported is either the fair market value at the end of the calendar year, or if withdrawn from the account, the value at the time of the withdrawal.

If you have any questions, please contact your Amper representative or a tax member of Amper’s International Services Group.

AMPER'S INTERNATIONAL TAX GROUP:

Richard Sackin Sackin@amper.com 732.287.1000 Richard Lichtig Lichtig@amper.com 201.678.1400 Jack Meola Meola@amper.com 908.218.5002

Patrick Rush PRush@amper.com 215.881.8800 Cristina Wolff Wolff@amper.com 212.682.1600 Jonathan Lysenko Lysenko@amper.com 212.682.1600

Adnan Islam Islam@amper.com 732.287.1000 Michael Mincieli Mincieli@amper.com 212.682.1600