CLVN's US Tax Blog

Updated Foreign Bank Account Report (FBAR) Form and Instructions Available (Revised November 2011)

If you haven't yet submitted your 2010 (or earlier) Foreign Bank Account Report (FBAR), make sure you use the latest version of Form TD F 90-22.1. The form should mention "Rev. November 2011" in the upper-left-hand corner. The latest form can be found at http://www.irs.gov/pub/irs-pdf/f90221.pdf.

David Colvin is a CPA and CFP^® based in Amsterdam, Netherlands since 1998. His niche focus is serving high-net-wealth individuals with cross-border tax and financial issues. In addition to his activities at CLVN, he is an advisor to Maxim Global Wealth Advisors.

IRS Gives Taxpayers Another Chance to Disclose Foreign Bank Accounts

The IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through Aug. 31, 2011.

For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign 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. Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.

For more information see: http://www.irs.gov/newsroom/article/0,,id=234900,00.html?portlet=7

David Colvin is a CPA and CFP^® based in Amsterdam, Netherlands since 1998.  His niche focus is serving high-net-wealth individuals with cross-border tax and financial issues.  In addition to his activities at CLVN, he is an advisor to Maxim Global Wealth Advisors.

How to Complete Your 2010 Foreign Bank Account Report (FBAR), Form TD F 90-22.1

Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts is due every year on June 30, with no extensions possible.  This form needs to be completed if the total combined value of all of your accounts outside of the United States exceeded $10,000 at any point in 2010. 

Gathering Information:  In order to complete the form for 2010 you will need the following information for every bank and financial account located outside of the United States in 2010 (even for one day in 2010) for which you were the owner and/or had signature authority, even if the balance of the account did not ever exceed $10,000:

1)  Name and address of the Financial Institution
2)  Type of Account (e.g. Bank (generally checking or savings accounts) or Securities (generally accounts holding stocks and bonds))
3)  Account Number
4)  Account Owner (e.g. you, your spouse, joint, your child(ren), your parent)
5)  Maximum Value in local currency shown on any quarterly or more frequent statement in 2010 (see Part II, Item 15 on Page 7 of the form and instructions)

Types of Accounts:  There are four "types" of accounts possible on this form, but only three apply to individuals.  Make sure to report each account in the correct "Part":

Part II:  Accounts held by you separately
Part III:  Accounts held by you and another person(s) jointly
Part IV:  Accounts for which you had signature authority but no financial interest (e.g. company accounts)

Exchange Rate(s):  Convert the "Maximum Value" to USD using the exchange rate on December 31, 2010, regardless of the date that the highest balance actually occurred during the year.  For EUR-USD, the December 31, 2010 exchange rate was EUR 1 = $1.32515.  For other currencies, you can find the exchange rate at www.oanda.com.

Joint Accounts with Spouse:  If your spouse only had joint accounts (together with you), and no separate accounts, he/she does not need to file a separate form, but they do need to sign in Box 44 (indicate "spouse" after the signature).  In Part III, where you list the joint owner, indicate "Spouse" after their name on each account.  However, if your spouse had any separate accounts, they need to complete a separate form, including the joint accounts also.

Common mistakes:
1)  Don't forget to put the year in the top-right corner of the first page.
2)  Don't forget to tick the box for "Individual" in Box 2.
3)  If you have a US SSN ot ITIN, include this in Box 3.  In this case you do not need to complete Box 4.
4)  Include your birthdate in Box 5.
5)  Make sure the "Maximum Value" for each account is in USD.
6)  Don't forget to sign (and your spouse if applicable) and date the form.

Due Date:  Form TD F 90-22.1 must be received by June 30.  No extensions are possible.  This is different than your tax return, which must be mailed/postmarked by April (or June) 15, and extensions are possible.  We advise sending no later than June 15 to make sure it arrives on time. 

Mailing:  Once you have completed the form, mail it to the address shown on the first page:

U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI  48232-0621

The street address for mailing Form TD F 90-22.1 by courier:

IRS Enterprise Computing Center
Attn: CTR Operations Mailroom, 4th Floor
985 Michigan Avenue
Detroit, MI  48226
(313) 234-1062 (for delivery personnel only)

This form looks deceptively simple, so beware!  These are only the basic rules.  If you have a "non-standard" situation, you may want to consult with your tax advisor, and/or buy the 180 page E-Book Guide to Reporting Foreign Financial Accounts, which can be purchased for $49 at www.offshorepress.com.

David Colvin is a CPA and CFP^® based in Amsterdam, Netherlands since 1998.  His niche focus is serving high-net-wealth individuals with cross-border tax and financial issues.  In addition to his activities at CLVN, he is an advisor to Maxim Global Wealth Advisors.

How To Confirm Receipt Of Your Foreign Bank Account Report (FBAR), Form TD F 90-22.1

Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (also known as FBAR) must be received (not mailed or postmarked) by June 30 each year.  If you have not yet completed the form, see my post on March 1, 2010 for how to complete this form and where to send it (also by courier).

In order to confirm that the report was received on time, you can use a courier (EUR 40-60 or more) or send by registered mail (in NL, "aangetekend met toeslag handtekening retour" which currently costs EUR 8.15), both of which can be tracked and require a signature at the other end.  I would recommend sending registered, but keep in mind that it can take 2-3 weeks (or more) for aangetend post to be "received" in the US, so send as early as possible.

If you send your FBAR by regular mail (or any other method for that matter), you can get verification of filing by sending a check for $5.00 (for up to 10 accounts), made payable to Internal Revenue Service, to:

IRS Detroit Computing Center
Compliance Review Team
Attn:  Verification
P.O. Box 32063
Detroit, MI  48232-0063

You should include your name, address and Social Security Number (or ITIN) with the request.

This sounds great, but unless you are really early, you won't find out if they have not received your form until after June 30, since it takes a few weeks to process and another few weeks to get back to you in Europe, potentially exposing you to severe penalties. 

To summarize:  If you still have enough time, I'd invest the EUR 8.15 for sending "aangetekend" and send at least three, preferably four or more, weeks before the June 30 deadline.

David Colvin is a CPA and CFP^® based in Amsterdam, Netherlands since 1998.  His niche focus is serving high-net-wealth individuals with cross-border tax and financial issues.  In addition to his activities at CLVN, he is an advisor to Maxim Global Wealth Advisors.

How to Complete Your 2009 Foreign Bank Account Report (FBAR), Form TD F 90-22.1

Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts is due every year on June 30, with no extensions possible.  This form needs to be completed if the total combined value of all of your accounts outside of the United States exceeded $10,000 at any point in 2009. 

Gathering Information:  In order to complete the form for 2009 you will need the following information for every bank and financial account located outside of the United States in 2009 (even for one day in 2009) for which you were the owner and/or had signature authority, even if the balance of the account did not ever exceed $10,000:

1)  Name and address of the Financial Institution
2)  Type of Account (e.g. Bank (generally checking or savings accounts) or Securities (generally accounts holding stocks and bonds))
3)  Account Number
4)  Account Owner (e.g. you, your spouse, joint, your child(ren), your parent)
5)  Maximum Value in local currency shown on any quarterly or more frequent statement in 2009 (see Part II, Item 15 on Page 7 of the form and instructions)

Types of Accounts:  There are four "types" of accounts possible on this form, but only three apply to individuals.  Make sure to report each account in the correct "Part":

Part II:  Accounts held by you separately
Part III:  Accounts held by you and another person(s) jointly
Part IV:  Accounts for which you had signature authority but no financial interest (e.g. company accounts)

Exchange Rate(s):  Convert the "Maximum Value" to USD using the exchange rate on December 31, 2009, regardless of the date that the highest balance actually occurred during the year.  For EUR-USD, the December 31, 2009 exchange rate was EUR 1 = $1.43322.  For other currencies, you can find the exchange rate at www.oanda.com.

Joint Accounts with Spouse:  If your spouse only had joint accounts (together with you), and no separate accounts, he/she does not need to file a separate form, but they do need to sign in Box 44 (indicate "spouse" after the signature).  In Part III, where you list the joint owner, indicate "Spouse" after their name on each account.  However, if your spouse had any separate accounts, they need to complete a separate form, including the joint accounts also.

Common mistakes:
1)  Don't forget to put the year in the top-right corner of the first page.
2)  Don't forget to tick the box for "Individual" in Box 2.
3)  If you have a US SSN ot ITIN, include this in Box 3.  In this case you do not need to complete Box 4.
4)  Include your birthdate in Box 5.
5)  Make sure the "Maximum Value" for each account is in USD.
6)  Don't forget to sign (and your spouse if applicable) and date the form.

Due Date:  Form TD F 90-22.1 must be received by June 30.  No extensions are possible.  This is different than your tax return, which must be mailed/postmarked by April (or June) 15, and extensions are possible.  We advise sending no later than June 15 to make sure it arrives on time. 

Mailing:  Once you have completed the form, mail it to the address shown on the first page:

U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI  48232-0621

The street address for mailing Form TD F 90-22.1 by courier:

IRS Enterprise Computing Center
Attn: CTR Operations Mailroom, 4th Floor
985 Michigan Avenue
Detroit, MI  48226
(313) 234-1062 (for delivery personnel only)

This form looks deceptively simple, so beware!  These are only the basic rules.  If you have a "non-standard" situation, you may want to consult with your tax advisor, and/or buy the 152 page E-Book Guide to Reporting Foreign Financial Accounts, which can be purchased for $38 at www.offshorepress.com.

David Colvin is a CPA and CFP^® based in Amsterdam, Netherlands since 1998.  His niche focus is serving high-net-wealth individuals with cross-border tax and financial issues.  In addition to his activities at CLVN, he is a major shareholder of Taxpat BV and an advisor to Maxim Global Wealth Advisors.