Professional Documents
Culture Documents
FBAR Memo
FBAR Memo
1
3. Are not required to provide information about the bankers,
lawyers and accounts who assisted them
The IRS plan was developed amid widening investigation into
American clients of UBS but will apply to clients of other banks.
According to Douglas Shulman, the IRS Commissioner, the goal
“is to get Taxpayers who have been hiding assets offshore back
into the system.”
The following is a summary of tax returns due for Foreign Bank
Accounts:
A.In General
2
1. Definitions
2. Ownership of Accounts
3
b. A corporation in which the U.S. person owns directly or
indirectly more than 50 percent of the total value of
shares of stock;
3. Signature Authority
For purposes of Form TD F 90.22-1, a U.S. person is
considered to have signature authority over a foreign financial
account if such person can control the disposition of money or other
property in the account by delivering his or her signature (or his or
her signature and that of one or more other persons) to the bank or
other person maintaining the account.
In addition, a U.S. person has "other authority" subject to
FBAR reporting if such person can exercise comparable power
over an account by direct communication to the bank or other person
maintaining the account, either orally or by some other means.
4. Exceptions
4
2. An officer or employee of a domestic corporation whose equity
securities are listed upon national securities exchanges or
which has assets exceeding $10 million and 500 or more
shareholders of record need not file such a report concerning
the other signature authority over a foreign financial account
of the corporation, if he has NO personal financial interest in
the account and he has been advised in writing by the chief
financial officer of the corporation that the corporation has
filed a current report, which includes that account.
C. Mechanics of Filing
Reporting on Form TD F 90-22.1 is required for each calendar
year that a U.S. person maintains such interest or authority over
foreign financial accounts. Persons having a financial interest in 25
or more foreign financial accounts are required only to note that
fact on the form (i.e., a general statement indicating that
information on all such accounts will be available upon request).
(31 CFR § 103.24. Such persons will be required to provide detailed
information concerning each account when so requested by the
Secretary or his delegate.)
D. Additional Issues
5
Each U.S. person subject to this reporting requirement must
also maintain records showing, (1) the name in which each such
account is maintained, (2) the number or other designation of such
account, (3) the name and address of the foreign bank or other
person with whom such account is maintained, and (4) the type of
such account, and the maximum value of each such account
during the reporting period (31 CFR §103.32). These records must
be retained for a period of 5 years and must be kept at all times
available for inspection as authorized by law.
6
F. Form TD F 90.22-1
A willful violation of the Form TD F 90.22-1 requirements (i.e.,
failure to file Form TD F 90.22-1, failure to supply information on the
report, or filing a false or fraudulent report) could result in the
imposition of civil and/or criminal penalties. (The instructions for
Form TD F 90.22-1 specifically provide that criminal penalties for
failing to comply with FBAR are provided in 31 U.S.C. § 5322(a) and
(b), and 18 U.S.C. § 1001. In addition, civil penalties for failure to
comply are generally provided in 31 U.S.C. § 5321.)
Civil Penalties
Criminal Penalties
7
material fact, (2) makes any materially false, fictitious, or fraudulent
statement or representation, or (3) makes or uses any false
writing or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or entry, such person may
be fined, or imprisoned for not more than 5 years, or both (18 U.S.C.
§ 1001).
Criminal
Negligent Violation Civil Penalties Comments
Penalties
(1 Up to $10,000 for each 31 U.S.C.§
Non-Willful Violation N/A
) violation. 5321(a)(5)(B)
Up to the greater of
(2 $100,000, or 35 percent of
Negligent Violation N/A 31 U.S.C.
) the greatest amount in the
account.
Criminal
Intentional Violation Civil Penalties Comments
Penalties
31 U.S.C.
Up to the greater of §5321(a)(5)(C)
Up to
(1 Willful - Failure to File FBAR $100,000, or 50 percent of 31 U.S.C. § 5322(a)
$250,000 or 5
) or retain records of account the greatest amount in the and 31 C.F.R.
years or both
account. §103.59(b) for
criminal
Willful - Failure to File FBAR Up to the greater of 31 U.S.C. § 5322(b)
Up to 500,000
(2 or retain records of account $100,000, or 50 percent of and 31 C.F.R.
or 10 years or
) while violating certain other the greatest amount in the §103.59(c) for
both
laws account. criminal
Up to the greater of
18 U.S.C. § 1001,
(3 Knowingly and Willfully Filing $100,000, or 50 percent of $10,000 or 5
31 C.F.R. § 103.59(d)
) False FBAR the greatest amount in the years or both
for criminal
account.
Gary S. Wolfe
A PROFESSIONAL LAW CORPORATION
9100 Wilshire Blvd., Suite 530 East
Beverly Hills, CA, 90212
Tel: 310-274-8847 Fax: 310-274-3118
http://www.gswlaw.com
email: gsw@gswlaw.com