Delinquent Foreign Bank Account Reporting (FBAR) Special Deadline Fast Approaching

Every U.S. citizen or resident, including all forms of organizations, having a financial interest in, or signature or other authority over a financial account in a foreign country must make an annual report to the U.S. Treasury Department.  The report is made for each calendar year using form TD F 90-22.1.  The report must be received (not postmarked) by June 30th of the next year.  No extension of time to file the report is permitted.  The report is a separate filing and is not included with your income tax return, although certain questions in your income tax return about foreign bank accounts must be answered.  No report is required if the aggregate value of all foreign accounts do not exceed $10,000 at any time during the calendar year.  The requirements regarding the need to file this report are complex and extensive, including for example, persons and organizations that own more than 50% of an entity (domestic or foreign) having foreign accounts.  Very significant financial penalties exist for late or non-filing.

The Treasury Department and the IRS have made a big push to improve taxpayer compliance.  A new "Voluntary Compliance Program" gives certain qualifying taxpayers until September 23, 2009 to file the FBAR for 2008 (which normally would have been due June 30, 2009) and avoid penalty.  See the IRS website for more details:  http://www.irs.gov/newsroom/article/0,,id=210174,00.html

UPDATE:  The IRS announced on September 21, 2009 a one-time extension of the September 23, 2009 due date until October 15, 2009.