FURTHER RELIEF PROVIDED ON US FOREIGN BANK ACCOUNT REPORTING
The Internal Revenue Service has continued its suspension of certain US foreign bank account reporting requirements. In February, they announced that persons who are not US citizens, US residents or US domestic entities do not need to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) for 2009 and earlier calendar years. This is welcome relief for non-residents of the US who are in or conducting business in the US. As previously advised in our Tax Factor 2009-02 publication, the US Treasury had expanded who was required to file this form to include “a person in and doing business in the United States”. This could have caught a Canadian individual or corporation who is conducting business in the US, even if the individual or corporation is not subject to US federal tax on its business activities because they do not have a permanent establishment in the US. In June 2009, this filing requirement was initially suspended for non-US persons for the 2008 calendar year. As noted above, this suspension is now continued for the 2009 calendar year.
The filing requirement will still apply to a US person, which is defined as a citizen or resident of the US, a US domestic partnership, a US domestic corporation, or a US domestic estate or trust. The penalties for not filing when required are substantial. This form is due on June 30, 2010 for the 2009 calendar year. Note that relief has been provided in certain specific situations.
Draft regulations and filing instructions dealing with future FBAR filing requirements have been released for comment and further announcements are expected. Contact your BDO advisor if you have any questions about your US filing obligations.
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The information in this publication is current as of May 1st, 2010.
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