May 02, 2011
Taxation Alerts

Tax Alert: FBAR, "Signature Authority," and June 30, 2011 Deadline
by Bridget McInerney Harris

Any U.S. person, which includes a U.S. citizen or resident, who has a financial interest in or signature authority or other authority over any financial account in a foreign country if the aggregate of the accounts exceeds $10,000 must file a Report of Foreign Bank and Financial Account("FBAR").  A person is considered to have signature authority over an account if such person can control the disposition of money or their property in the account by delivery of a document (i.e. check) containing his or her signature.  A person is considered to have "signature authority" even if another person must co-sign.  An example of signature authority is a US citizen who can co-sign a check of a foreign bank with a parent who is the owner of that account.

IRS Notice 2010-23 provides administrative relief to certain persons who may be required to file an FBAR for calendar year 2009 (or earlier).  The IRS (IRS Notice 2009-62, 2009-35 I.R.B. 260) previously extended the filing deadline for persons with no financial interest in a foreign financial account but with signature authority over that account.  Persons with signature authority over, but no financial interest in, a foreign financial account for which an FBAR would otherwise have been due on June 30, 2010 (or earlier) will now have until June 30, 2011 to report those foreign accounts.  The deadline of June 30, 2011 applies only to persons with signature authority but not any financial interest in the foreign financial account for the year 2010 and prior calendar years.  The deadline for filing for persons with signature authority over a foreign financial account in 2010 is not extended and must also be filed by June 30, 2011.

For the link to FBAR Form: TD F 90-22.1, click here.  For more information on IRS Notice 2010-23, click here. 

IRS Circular 230 Disclosure
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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