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Please be advised that the deadline for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (“FBAR”), is June 30, 2010. A brief summary of the FBAR reporting is as follows:

• Each United States person who has a financial interest in, or signature authority, over any financial account in a foreign country is required to file an FBAR if the aggregate value of the accounts exceed $10,000 at any time during the calendar year.
• “United States person” means a citizen or resident of the United States, or a person in and doing business in the United States and includes individuals, corporations, partnerships, trusts and estates, associations, other unincorporated organizations, and all entities recognizable as legal personalities.
• Financial accounts include those in banks, securities, or other financial accounts.
• A financial interest includes one in which a person is either:
  • The owner for his or her own benefit or the benefit of others,
  • An agent on behalf of a United States person,
  • A corporation in which the United States person owns directly or indirectly more than 50% of the total value of shares or voting power,
  • A partnership in which the Unites States person owns an interest in more that 50% of the profits or capital of the partnership, or
  • A trust in which the United States person has a direct or indirect present beneficial interest.
• In determining whether an account is in a foreign country, you look to the geographical location of the account, not the nationality of the financial institution in which the account is found.
• Consolidated reports are permitted for corporations that own directly or indirectly more than 50% in one or more other entities.
• In February 2010, the IRS issued guidance suspending the filing requirement for financial interests in foreign investment funds other than offshore mutual funds. U.S. persons with a financial interest in a foreign hedge fund or private equity fund during 2009 do not have to file a FBAR with respect to such interest. U.S. persons with a financial interest in a mutual fund located offshore are still required to report their interest in such account.
• The willful failure to file the FBAR is punishable criminally by up to five years in jail and civilly by a penalty of the greater of $100,000 or 50% of the amounts in the unreported foreign accounts. A nonwillful failure to file the FBAR can result in a civil penalty of $10,000, although this penalty can be waived based on reasonable cause.
• The annual due date for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), is June 30. The FBAR must be received by the IRS on or before June 30. Unlike tax returns, the FBAR is considered filed on the day it is received by the IRS. Postmarks are not considered evidence of timely filing.
• There is no extension of time available for filing this report.

Next Steps

Companies should diligently review and evaluate compliance with all applicable foreign information reporting requirements. Please contact Rich Sackin at 732-287-1000 Ext 1316 or Jim Alajbegu at 732-287-1000 Ext 1501 to evaluate your company’s foreign information reporting requirements.

The above Alert has been prepared with the assistance of Harry A. Golematis, CPA, JD, a Senior Tax Manager in Amper’s Wall office. Harry can be reached at 732.919.6230.

Contact: Richard Sackin and Jim Alajbegu