Publication

“FBAR Filing Deadline is June 30, 2009”

Every U.S. person or entity that had a financial interest in, or signature or other authority over, any financial account located in a foreign country, at any time during the 2008 calendar year, where the aggregate value exceeded $10,000, must file Form TD F 90-22.1, the Report of Foreign Bank and Financial Accounts (“FBAR”), by June 30th, 2009. Civil penalties for “willful” failure to file include fines equal to the greater of $100,000 or 50% of the amount in the foreign account at the time of the violation. Civil penalties for non-willful failure to file include fines of up to $10,000 for each negligent violation. On June 12, 2009, IRS representatives indicated on a teleconference that an equity interest in an offshore hedge fund would be treated as a foreign financial account for purposes of FBAR filings. This position is not consistent with prior unofficial IRS guidance or with current practice, and it is possible that the IRS may take an official position to clarify the issue before the June 30 filing deadline. However, given the potential penalties for non-compliance, U.S. persons discussed in this Stroock Special Bulletin should consider making, or at least being prepared to make, precautionary filings.