Global IRW Newsbrief Now is the time to notify officers

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Global IRW
Newsbrief
Information reporting and withholding (IRW)
January 26, 2012
Now is the time to notify officers
and employees of their 2012 FBARrelated reporting obligations
Officers and employees who are U.S. citizens or residents may have to file a Form TD
F 90.22-1, Report of Foreign Bank and Financial Accounts (FBAR), by June 30,
2012 to report a financial interest in, or signature or other authority over, foreign
financial accounts. In addition, individual taxpayers must affirmatively state on their
U.S. federal income tax returns whether they have a financial interest in, or signature
or other authority over, foreign financial accounts and whether they are required to
report these accounts on an FBAR. As a result, companies may need to provide
officers and employees who are U.S. citizens or residents and who have signature or
other authority over company-owned foreign financial accounts with information
about the accounts now to allow these individuals to meet their reporting obligation.
Background
FBAR
Generally, any U.S. person with a financial interest in, or signature or other authority
over, foreign financial accounts with an aggregate value of over $10,000 in any
calendar year is required to report the accounts on an FBAR by June 30 of the year
following the calendar year in which the threshold is satisfied. For this purpose, U.S.
persons include U.S. entities, U.S. citizens, and U.S. residents.
Under these rules, U.S. companies with foreign financial accounts with an aggregate
value of more than $10,000 during the calendar year are required to file an FBAR for
the company to report these accounts. In addition, unless an exception applies, U.S.
citizens and residents who are officers and employees of any company (foreign or
domestic) and who have signature authority over company-owned accounts may also
have an FBAR filing obligation with respect to these accounts if the reporting
threshold is satisfied. An exception may apply if the officer or employee has
signature authority over, but no financial interest in, the foreign financial accounts of
an employer and the employer is a U.S. public company, a U.S. subsidiary of a U.S.
public company, or a U.S. regulated entity such as a U.S. bank.
For more information about FBAR, see previously published Global IRW Newsbrief
articles, including "New FBAR rules significantly expand the number of employees
now required to file an FBAR by June 30, 2011," and "Final foreign bank account
reporting (FBAR) regulations released."
Form 1040
Individuals who have a financial interest in, or signature or other authority over, a
foreign financial account must affirmatively indicate this by checking "Yes" on Line
7a of Schedule B of their 2011 Form 1040, U.S. Individual Income Tax Return. This
is the case even if the individual is not required to file an FBAR (for instance, if the
aggregate value of foreign financial accounts for the year is less than $10,000 or the
signature authority exception applies). If the individual is required to file an FBAR,
the individual also must affirmatively indicate this by checking "Yes" on Line 7a of
Schedule B of their 2011 Form 1040. This is a change from prior years. On Forms
1040 for years before 2011, individuals were not required to report a financial interest
in, or signature authority over, a foreign financial account unless the individual also
was required to file an FBAR.
Individuals with signature authority may need
information from employers now to complete 2011
Forms 1040
While the 2011 FBAR is due on June 30, 2012, individuals may be filing their 2011
Form 1040 as early as February 2012. Therefore, companies with officers or
employees who have signature authority over company-owned accounts should
consider informing these individuals now so that the individual has this information
to complete Line 7 of Schedule B of their 2011 Form 1040. Companies will also need
to consider how to provide account information (such as the account number, the
maximum value of the account, and the name and address of the financial institution
where the account is held) to signers so these individuals can complete their
individual FBAR.
Note that pursuant to FinCEN Notice 2011-1, June 30, 2012 is also the extended due
date for officers and employees with signature authority and no financial interest in
company-owned foreign financial accounts to report signature authority over
company-owned accounts maintained in years prior to 2011. Therefore, companies
may need to provide signers with information about accounts maintained in prior
years as well.
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Use January 2012 version of the Form TD F 90.22-1
A revised version of the Form TD F 90.22-1 was released in January 2012. Changes
from the November 2011 version of the form are minimal, and relate to contact
information for questions regarding FBAR. FBAR filers should use this version of the
form to report foreign accounts maintained in 2011, as well as foreign accounts
maintained in prior years.
For more information, please do not hesitate to contact:
Dominick Dell'Imperio (646) 471-2386 [email protected]
Kevin Brown
(202) 346-5051 [email protected]
Candace Ewell
(202) 312-7694
[email protected]
Rochelle Hodes
(202) 312-7859
[email protected]
Joe Maselli
(646) 471-5156
[email protected]
Kim Schoenbacher
(646) 471-2664 [email protected]
This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
SOLICITATION
© 2012 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers LLP, a Delaware
limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a
separate legal entity.
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