US Tax Update

US Tax Update

Form TDF 90-22.1 Foreign Bank and Financial
Accounts Disclosure Requirements – Just Updated



The U.S. Treasury has just drastically amended the procedure to report foreign financial account information with effect from 01.11.2008. New procedures require more information from filers on all accounts. Tax preparers who process this return for clients will expose themselves to greater liability. Taxpayers can expect the cost of compliance to rise significantly.

We reminded Americans in June 2008 that the foreign bank account disclosure form (FBAR) is due each June 30 to the US Treasury Department for the prior calendar year.  The form is required if you had one or more foreign financial accounts having an aggregate balance of $10,000 or more any time during 2007 and will list all foreign accounts – even those that might have individually not have surpassed the $10,000 limit. The accounts covered by this report includes also employer company accounts over which a filer has sole- or co-signature authority.

Filers must also be sure to check the box in part III of Schedule B on their form 1040 to ensure that they file a complete return. The failure to file a complete return extends the statute of limitations for your entire tax return.

Also read:  Honest Czechs are seventh most likely in the world to return a lost wallet

A willful failure to file the form is subject to penalties of up to $500,000 and five years in prison. A non-willful failure to file the form is subject to a penalty of up to $10,000. Therefore, if the government concludes that you should have filed the form and you didn’t, it could cost you at least $10,000 for each calendar year that it isn’t filed.

In the past many preparers have prepared the FBAR on behalf of clients for little or no additional charge. This can be expected to change as new guidance from the IRS states that a practitioner must comply with FBAR rules as part of his or her due diligence obligation under Section 10.22 of Circular 230. In particular, “Each attorney, certified public accountant, enrolled agent, or enrolled actuary shall exercise due diligence:

(a) In preparing or assisting in the preparation of, approving, and filing returns, documents, affidavits, and other papers relating to Internal Revenue Service matters;
(b) In determining the correctness of oral or written representations made by him to the Department of the Treasury; and
(c) In determining the correctness of oral or written representations made by him to clients with reference to any matter administered by the Internal Revenue Service”

Also read:  Honest Czechs are seventh most likely in the world to return a lost wallet

The new form requests information not previously requested, including the highest balance on an account during the tax period and the address of the bank where the account is held. It also requests tax identification, name and address information of the filer, joint filers or employer – whoever has a financial interest in the account.

Additional inquiries about the FBAR filing requirements may be resolved by reading:
“FAQs regarding Report of Foreign Bank and Financial Accounts (FBAR),” and other FBAR information available on the IRS web site at www.irs.gov.  Specific questions and comments may be emailed to the following address: FBARquestions@irs.gov.  Questions concerning a preparer´s ethical obligations in this area may be addressed to the Office of Professional Responsibility at: opr@irs.gov.

________________________________________
CFO2GO is a specialist in outsourced accounting services. It also assists executives and entrepreneurs and their businesses to fulfill their US and Czech tax and accounting reporting obligations. CFO2GO also provides extensive interim financial management and statutory governance to small and medium-sized businesses.

Also read:  Honest Czechs are seventh most likely in the world to return a lost wallet

The comments in this article are not intended to constitute an opinion regarding any specific tax issues because additional tax issues may exist that could affect the tax treatment of the tax issues addressed in this memo.  This memorandum does not consider or reach a conclusion with respect to those additional issues and was not written and cannot be used for the purpose of avoiding penalties under US code section 6662(d).
 
For further information, please refer to our web site at
www.cfo2goeurope.com or contact John Mohr on at john.mohr[at]cfo2goeurope.com


John Mohr

... bio coming soon!

Jobs in Prague for English & Multilingual Speakers

Click for 100's of jobs in Prague for English and multilingual speakers in Prague.

Show all jobs
Facebook Comments
Close Menu