Further Updates - FBAR Reporting - Requirements For Employee Benefit Plans

Since our previous Alert, the Treasury Department has issued final regulations and a new disclosure form for the Report of Foreign Bank and Financial Accounts (FBAR), instituted a new Offshore Voluntary Disclosure Program, and provided certain individuals with extensions of filing deadlines.

FBAR REPORTING

The actual FBAR filing is short and simple; however, the penalties are potentially severe – civil penalties of up to $10,000 for a nonwillful violation and the greater of $100,000 or 50 percent of the amount in the account for willful violations. Criminal penalties could also apply.

FBAR reporting is required of any "U. S. person" (U. S. citizens and residents, and domestic corporations, partnerships, and trusts, including employee benefit trusts) that holds either a financial interest in or signatory authority over a foreign financial account if the aggregate value of such accounts exceeds $10,000 at any time during the calendar year. The 2010 disclosure is