Form 90-22.1 Report of Foreign Bank and Financial Accounts

To Our Clients and Friends,

Re: Supplement on Second Extension of Time to File FBARs

In our Tax Alert of June 23, 2009, we advised you of comments by Internal Revenue Service (IRS) personnel which could require U.S. investors and others involved with offshore investment funds to file U.S. Treasury Department Forms TD F90-22.1 (FBARs) for non-U.S. bank and financial accounts where the aggregate value of the accounts exceeds $10,000 at any time during the year.

Partly in response to such uncertainties about FBAR filing requirements the IRS provided an extension under certain conditions until September 23, 2009, for the filing of FBARs for 2008.

In Notice 2009-62, the Internal Revenue Service has now announced the following limited second extension for filing certain (but not all) FBARs:

“Extended Date for Filing an FBAR
In light of the additional time needed for the Department of the Treasury to address issues pertaining to FBAR filing requirements and the need to provide administrative relief for (i) persons with signature authority over, but no financial interest in, a foreign financial account, and (ii) persons with a financial interest in, or signature authority over, a foreign commingled fund [emphasis added], this Notice provides that those persons have until June 30, 2010, to file an FBAR for the 2008 and earlier calendar years with respect to these foreign financial accounts. Thus, eligible persons that avail themselves of the administrative relief provided in this Notice may need to file FBARs for the 2008, 2009 and earlier calendar years on or before June 30, 2010, to the extent provided in future guidance.
The FBAR filing extension provided by this Notice applies to FBARs with respect to 2008 and earlier calendar years. For (i) persons with signature authority over, but no financial interest in, a foreign financial account, and (ii) persons with a financial interest in, or signature authority over, a foreign commingled fund, the FBAR filing extension provided in this Notice supplements the filing extension to September 23, 2009, previously provided by the IRS on its public website.”

For filing requirements not covered by these first and second limited extensions, please be reminded that generally penalties for late filings may only be abated for reasonable cause at the IRS’s discretion, and that the IRS has also previously announced a Voluntary Disclosure Program for Offshore Accounts and Income which permits filing of late and amended FBAR and other returns for the previous six years by September 23, 2009, under certain circumstances.

For more information, please contact a Frank, Rimerman + Co. LLP tax professional.

Any tax advice in this communication is not intended or written by Frank, Rimerman + Co. LLP to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein. With this communication, Frank, Rimerman + Co. LLP is not rendering any specific advice to the reader.