Due to the impact of Hurricane Irene, the IRS has extended the deadline for offshore voluntary disclosure initiative (OVDI) requests to September 9, 2011. The new deadline also applies to the filing of any delinquent Forms TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) (FBAR).
If you are a US Citizen or Legal Permanent Resident (Green Card holder) and you have not reported on your US tax returns income from overseas bank accounts or investments then you should take advantage of the OVDI. This will minimize the penalties the IRS will charge due to the failure to report all of your income on your US tax returns.
There is a two step process whereby you submit some initial information and an extension request by September 9, 2011. The extension will give you 90 days to submit the rest of the OVDI package.
If you have correctly reported all of your overseas income on your US tax returns but failed to file the annual FBAR then take advantage of the new deadline to bring your FBAR filings up to date. Provided you have no unreported tax liabilities the IRS will not charge a penalty for late filing of any FBARs.
The FBAR is an annual return of overseas bank accounts and investment accounts held by US Citizens, Green Card holders and others with signature authority over such accounts. If the total value of such accounts exceeds $10,000 at any time in the calendar year a FBAR should be filed with the Department of Treasury by June 30 of the following year. i.e. the 2010 FBAR should have been filed by June 30, 2011.
The late filing of the FBAR can lead to substantial penalties making the current concession and extended deadline attractive to bring late FBARs up to date.
For UK Green Card holders be aware that defined contribution pension policies such as personal pension policies and old FSAVCs that you still hold in the UK count as investment accounts for the purpose of the FBAR. So it is very easy to go over the $10,000. Look beyond any bank accounts you still hold in the UK and check for pension policies, brokerage accounts and investment or unit trust savings accounts.
For more information on the OVDI see the following IRS links:-
2012 Offshore Voluntary Disclosure Program
Streamlined Filing Compliance Procedures
Delinquent FBAR Submission Procedures
Delinquent International Return Submission Procedures
If you would like assistance with the OVDI or filing FBARs please contact us by email or by phone at (480) 363-4808.
Cranmere Accounting & Tax Services
