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The Treasury Department’s Financial Crimes Enforcement Network has issued final changes to the regulations that require the reporting of foreign financial accounts. The ruling addresses who is required to file reports, what types of foreign accounts are reportable, and how certain individuals may obtain relief from the filing requirements.
Although the ruling applies to every foreign account holder, it should be of specific interest to anyone who deferred filing in calendar year 2009 and earlier. Deferrals were awarded to allow time to develop guidance for individuals with complex situations, including signature authoring issues and investment in foreign comingled funds.
Key Point: The deadline for FBAR submission is June 30, 2011! If you have deferred a FBAR filing in 2009 or 2010, the new Treasury rules should be applied to determine whether a filing is required.
Key Aspects of the Final Rules
The new ruling provides significant clarification for several complex situations. Below we have outlined the provisions most relevant to our clients.
Penalties for Noncompliance
There can be severe penalties for noncompliance with FBAR filing requirements. Civil penalties for “non-willful” violations can range in fines up to $10,000 per violation. Civil penalties for “willful” violations can result in fines up to $100,000 or 50% of the amount in the account at the time of violation. There are also criminal penalties for noncompliance which range from a $250,000 to $500,000 fine, 5-10 years in prison, or both depending on the circumstances. In addition, civil and criminal penalties may be imposed together!
Do you know how the new rules will impact your filing requirements? The deadline for FBAR submission is June 30, 2011! The deadline is approaching quickly and the penalties for noncompliance can be significant! CALL US NOW to determine whether you are required to submit a FBAR filing with the IRS. For additional information on the new FBAR regulations or any other International Tax issues, contact Mark Chaves, CPA, Partner in Charge of International Tax, at 561-367-1040, or click here to email Mark.