This memorandum updates our June 29, 2009 memorandum regarding Foreign Bank and Financial Account Reporting (“FBAR”).

On Friday, August 7, 2009, in Notice 2009-62, the IRS announced that the deadline for filing 2008 and earlier-year FBARs is extended until June 30, 2010 for (i) any person having signature authority over, but no financial interest in, a foreign financial account (but only with respect to that account) or (ii) any person having a financial interest in a foreign commingled fund (but only with respect to that fund).

Therefore, so long as a person who has signature authority over a financial account has no financial interest in that account, the person need not file a personal FBAR with respect to the foreign financial account until June 30, 2010. In addition, under the Notice, FBARs are not required with respect to interests in foreign hedge funds, foreign private equity funds, or other foreign commingled funds until June 30, 2010. However, as discussed in our memorandum of June 29, 2009, for other foreign financial accounts (such as foreign bank, securities, derivatives, or other financial instrument accounts), FBARs should have been filed prior to June 30, 2009 or, if the taxpayer only recently learned of its FBAR filing obligation and had insufficient time to gather the necessary information to complete the FBAR, it should file the relevant FBARs by September 23, 2009 (in which case the FBAR filing should include a statement explaining why the FBAR was filed late and the tax return, if any, for the relevant year).

The Notice also seeks comments on a number of issues with regards to FBAR reporting, including:

  • Whether and when a person with signature authority over, but no financial interest in, a foreign financial account should be exempt from filing an FBAR for the account. For example, the Notice requests comments on whether FBAR reporting should be required for a person with signature authority over an account if a person that has a financial interest in the account has already filed an FBAR.
  • Whether all officers and employees with only signature authority over, and no financial interest in, an employer's foreign financial account should be exempt from FBAR reporting.
  • When an interest in a foreign entity (such as a corporation, partnership, trust, or estate) should be subject to FBAR reporting.
  • Whether exceptions to FBAR reporting should apply with respect to foreign hedge funds and private equity funds if those funds are already subject to reporting.