Offshore Voluntary Disclosure Initiative (OVDI) extended to sept 09, 2011

 The IRS today reminded taxpayers that the 2011 Offshore Voluntary Disclosure Initiative (OVDI) will expire on Aug. 31, 2011.Taxpayers who come forward voluntarily get a better deal than those who wait for the IRS to find their undisclosed accounts and income. New foreign account reporting requirements are being phased in over the next few years, making it ever tougher to hide income offshore. As importantly, the IRS continues its focus on banks and bankers worldwide that assist U.S. taxpayers with hiding assets overseas.

The IRS is extending the deadline for participation in the Offshore Voluntary Disclosure Initiative (OVDI) to Sept. 9, 2011, because of the potential impact of Hurricane Irene on taxpayers.

IRS-2011-84,  U.S. taxpayers hiding income in undisclosed offshore accounts are running out of time to take advantage of a soon-to-expire opportunity to come forward and get their taxes current with the Internal Revenue Service.

“The time has come to get back into compliance with the U.S. tax system, because the risks of hiding money offshore keeps going up,” said IRS Commissioner Doug Shulman. “Our goal is to get people back into the system. The second voluntary initiative gives people a fair way to resolve their tax problems.”

The 2011 OVDI was announced on Feb. 8, 2011, and follows the 2009 Offshore Disclosure Program (OVDP). The 2011 initiative offers clear benefits to encourage taxpayers to come forward rather than risk detection by the IRS. Taxpayers hiding assets offshore who do not come forward will face far higher penalties along with potential criminal charges.

For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in theforeign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent penalties in certain narrow circumstances.

Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties. All original and amended tax returns must be filed by the deadline.

The IRS decision to open a second special disclosure initiative was based on the success of the first program and many more taxpayers coming forward after the program closed on Oct. 15, 2009. The first special disclosure initiative program closed with about 15,000 voluntary disclosures regarding accounts at banks in more than 60 countries. Many taxpayers came in after the first program closed. These taxpayers were deemed eligible to take advantage of the special provisions of the second initiative.

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IRS ALERT: FILE FBAR (FORM FBAR) BY JUNE 30

IRS Alert: US residents need to report Foreign Bank and Financial Accounts by June 30(Thursday)

Issue Number: IR-2011-70 — The Internal Revenue Service today reminds everyone who has a bank or other financial account in a foreign country, or who has signature authority over such an account, that they may be required to report the account to the U.S. Department of the Treasury by June 30 each year.

Many people in the U.S. have foreign financial accounts. While there is nothing improper about setting up or maintaining such accounts, many people may mistakenly believe their accounts are not large enough on a combined basis to trigger reporting obligations. Foreign account owners may have to report their accounts to the government, even if the accounts do not generate any taxable income.

U.S. persons are required to file a Report of Foreign Bank and Financial Accounts (FBAR), Treasury Department Form TD F 90-22.1, each year if they have a financial interest in or signature authority over financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.

For 2010, the due date for filing the FBAR is Thursday, June 30, 2011. Unlike with federal income tax returns, requests for an extension of time to file an FBAR cannot be granted.

The FBAR is not an income tax return and should not be mailed with any income tax returns. It is due by June 30 of the year following the calendar year in which the aggregate value of the foreign accounts, on any one day, exceeds $10,000. But for 2009 and earlier years, the due date is generally Nov. 1, 2011 for individuals whose filing deadline was properly deferred under Notice 2009-62 or Notice 2010-23, and have no financial interest in a foreign financial account but with signature or other authority over that account.

Penalties for failing to report FBAR

Civil and criminal penalties for non-compliance with the FBAR filing requirements are significant. Civil penalties for a non-willful violation can range up to $10,000 per violation. Civil penalties for a willful violation can range up to the greater of $100,000 or 50 percent of the amount in the account at the time of the violation. Criminal penalties for violating the FBAR requirements while also violating certain other laws can range up to a $500,000 fine or 10 years imprisonment or both. Civil and criminal penalties may be imposed together.

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IRS Extended Deadline for FBAR reporting for the year 2009 and Earlier FBARs

The IRS has extended the deadline for certain persons to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts(FBAR), for 2009 and earlier years (IRS Notice 2011-54). The new filing deadline is Nov. 1, 2011. The extension applies to persons with signature authority over a foreign financial account, but no financial interest in the account.

FBAR: United States persons with a financial interest in, or signature authority over, any financial accounts (including bank, securities or other types of financial accounts) in a foreign country must file an FBAR if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.

This extension applies only to FBARs for 2009 or earlier years; the FBAR deadline for reporting financial accounts for 2010 remains same as June 30, 2011.

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Word of WARNING - The FBAR is not new but enforcement is better!!!

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If you own a foreign bank account, brokerage account, mutual fund, unit trust, or other financial account (including private pension savings in a foreign institution), then you may be required to report the account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial Accounts (FBAR), if

1. The person has financial interest in, signature authority or other authority over one or more accounts in a foreign country, and
2. The value of the account exceeds $10,000 at any time during the calendar year.

A United States person is not prohibited from owning foreign accounts. The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions.  The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law.  Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad. 

Filing the FBAR Online:

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• Allows users to print, save and retrieve the completed FBAR/TDF 90-22.01 tax forms in PDF format

We are the first and only company to offer FBAR online preparation in a fast, easy and affordable method. FBAR form can be completed in less than 10 minutes using our smart online wizard.

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IRS updated fbar regulations

U.S. Department of the Treasury (“Treasury”) issued On March 28, 2011, the Final Regulations, relating to the filing of Reports of Foreign Bank and Financial Accounts (“FBAR”) became effective. Final Regulations do not require ownership interests in, or signing or other authority over, private investment funds, such as hedge funds and private equity funds, to be reported on FBARs, although Treasury will continue to study the issue.
The Final Regulations apply to FBARs required to be filed by June 30, 2011 with respect to foreign financial accounts maintained in the calendar year 2010, and for all subsequent years. United States persons, who deferred FBAR filings for prior reporting years in accordance with guidance issued by Treasury, may apply the provisions of the Final Regulations in determining their FBAR filing requirements for any deferred reports due June 30, 2011.
A revised FBAR form (Form TD-F-90-22.1) and General Instructions, which should be used for the June 30, 2011 filing deadline, were also recently released.
Background Information Relating to FBARs
Any United States person, who has a financial interest in, or signature or other authority over, any foreign financial accounts, including bank, securities, or other types of financial accounts in a foreign country, must report that relationship each calendar year by filing an FBAR with Treasury on or before June 30 of the succeeding year, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.

US CITINZENS; Have you reported the FBAR?

You know guys June 30th is the last day to report your foreign bank accounts details (fbar) to IRS.

So remember, if you're an American citizen, and have over $10K in foreign bank account, savings account, you need to file this report (FBAR FORM) by June 30.

TD F 90-22.1

Deadline for 2010 FBAR forms is JUNE 30, 2011 – and unlike regular IRS tax forms.

 Who has to File?  U.S. taxpayers including citizens, residents, and entities that have foreign financial accounts totaling more than $10,000 at any point during the year.
What is an Account?  Foreign bank and brokerage accounts are generally included, as are offshore mutual funds or pooled investments.  However, hedge and private equity funds generally don’t count.
FBAR Penalties.  The penalties for failure to file are considerably worse than tax penalties.  Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation.  But if your violation is found to be willful, the penalty is the greater of $100,000 or 50% of the amount in the account for each violation–and each year you didn’t file is a separate violation.

IRS FBAR: FBAR due is fast approaching

IRS FBAR: FBAR due is fast approaching

FBAR due is fast approaching

TD F 90-22.1 Report the form TD F 90-22.1 to IRS by June 30 of the year following the year that the account holder meets the $10,000. The granting, by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR. Filers cannot request an extension of the FBAR due date.

If a filer does not have all the available information to file the return by June 30, they should file as complete a return as they can and amend the document when the additional or new information becomes available. Click on the below given link to know more about fbar.