Under Title 31 USC and Title 26 “US persons” now have until this July 2nd, 2009, unless extended, to file TD F 90-22.1 which requires reporting of all foreign bank, securities, derivatives, or financial product accounts over which the US person has “signatory authority” (read ‘dispositive power’) even if the person has zero financial or economic benefit. Disclosure is required if the balance is over $10,000 at any point in time for the last six calendar years ending in 2008. The balance is “best evidence” and not necessarily ends of month.
TD F 90-22.1, long required, but tepidly enforced is now subject to an IRS ‘amnesty’ program and at the same time, the IRS promises to prosecute non filers vigorously.
Taxpayers can now complete the TD Form for each of the past six years and pay-up 20% of the maximum balance in the account as ‘penalty’. The 20% penalty may be abated if taxpayer shows “reasonable cause”. If the IRS is already in possession of the taxpayer’s name, then he or she is not eligible for the amnesty (so conversely the taxpayer would fall under the vigorous prosecution subset).
Disclosure is mandated for US persons in ‘control’ of offshore partnerships, LLC’s or other entities; US officers of US based multinationals especially if CFC disclosures have not been made or required in the past; and, US income and remainder beneficiaries of foreign trusts must report. Liability attached at the individual not the entity level and so several individuals may report the same account for the same offshore entity or structure.
Also, current “offshore structures” for US persons may run afoul of the currency reporting provisions and need to be revised. The term US persons extend under Title 31 to persons ‘doing business in the US’ albeit these are not currently targeted.
Kindly feel free to contact the undersigned at: email@example.com or telephones (305) 375-9220.
Margarita P. Muina, J.D., LL.M.
Board Certified in International Law
Board Certified in Taxation