The Internal Revenue Service issued another notice this week regarding the procedure for late filing of the 2008 Form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts” (FBAR).

Taxpayers should make every attempt to file timely, as reports filed late need to be filed in duplicate. The original is to be filed according to the instructions on the form, along with a statement explaining why the FBAR is late.  A second copy must be sent to a different IRS Offshore Identification Unit (noted below), which is affiliated with the current IRS voluntary disclosure program. A copy of the taxpayer’s 2008 tax return needs to accompany duplicate FBARs filed with the Offshore Identification Unit.

Both filings must be submitted on or before September 23, 2009, to ensure the minimization of penalties. For income tax returns due after September 23, 2009, a copy of the 2008 return need not accompany the FBAR.  Please note: Though acceptable, this alternative process — involving the Offshore Identification Unit and filing the form with a copy of the return — could result in a higher level of scrutiny.

Still can’t meet the June 30 deadline?
Taxpayers who reported and paid tax on all their 2008 taxable income, but only recently learned of their FBAR filing obligation and have insufficient time to gather the necessary information to complete the FBAR, should file the delinquent FBAR report according to the instructions on the IRS Web site and attach a statement explaining why the report is filed late.

A copy of the delinquent FBAR, together with a copy of the 2008 tax return, should be mailed by September 23, 2009, to:

Philadelphia Offshore Identification Unit
Internal Revenue Service
11501 Roosevelt Blvd.
South Bld., Room 2002
Philadelphia, PA 19154
Attn: Charlie Judge, Offshore Unit, DP S-611

In this situation, the IRS will not impose a penalty for the failure to file the FBAR. The same procedures above also apply to U.S. personswho only recently learned they have a 2008 FBAR obligation.

For 2008 tax returns due after September 23, 2009, the tax return does not need to accompany the 2008 FBAR.

For filing of the FBAR by June 30, the following address may be used for delivery by carriers other than the U.S. Postal Service:

IRS Detroit Enterprise Computing Center
Attn: FBAR Mail Room, 4th Fl.
985 Michigan Avenue
Detroit, MI 48226

Any U.S. person who had either signature authority(or other authority) over financial interest in any foreign financial account at any time during the 2008 calendar year is required to file Form TD F 90-22.1, if the aggregate value of all such accounts exceeded $10,000 at any point during the year. Download a notice issued by RSM McGladrey on June 16 for more complete information.

The tax professionals at RSM McGladrey are ready to assist with determining your FBAR’s tax compliance needs and to help ensure that any penalties are avoided. Please contact the manager, director or managing director on your account, or email me directly, if you would like additional information or assistance in completing this filing.

Sincerely,

Richard Nichols
Managing Director, RSM McGladrey Inc.
O: 212.372.1135
E: richard.nichols@rsmi.com

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