BHATIA & CO, INC, Certified Public Accountants
5201 Great America Parkway, Ste # 256, Santa Clara, CA 95054.
Tel: (408) 845 9411. Fax: (408) 351 0700.
E-Mail: email@example.com Website : www.bhatiaco.com
Certified Public Accountant
Deadline for FBAR filing for 2011 is June 30, 2012
Unless you have already filed the same, this is to remind you that due date for filing of the FOREIGN BANK & FINANCIAL ACCOUNT REPORTING (FBAR) Form 90-22.1 is June 30, 2012. FBAR Form may be required to be filed if you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account.
FBAR form and instructions had been revised in 2011 to reflect the amendments made by the final regulations. The requirement as per IRS guidelines is that if at any time during the year, the aggregate of balances in overseas accounts was more $10000, then reporting has to be done by filing this form. This filing is independent of the Filing of Federal and/ or State Income Tax returns. You may be required to provide information even when you have signature or other authority but no Financial interest in the account.
New Reporting Requirements by U.S. Taxpayers Holding Foreign Financial Assets (Form 8938)
In addition to the FBAR filing, Taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. The new Form 8938 filing requirement does not replace or otherwise affect a taxpayers requirement to file FBAR. This Form is part of the Tax return and accordingly must be filed by the due date of Individual tax return in Form 1040.
If you are required to file Form 8938 but do not file a complete and correct Form 8938 by the due date (including extensions), you may be subject to a penalty of $10,000.
OFFSHORE VOLUNTARY DISCLOSURE PROGRAM 2012 (OVDP/ OVDI)
The IRS is also currently 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 FBAR filings and tax returns. The program is similar to the 2011 Offshore Voluntary Disclosure Initiative (OVDI) in many ways, but with a few key differences. Unlike last year, there is no set deadline for people to apply – at least as of now. The overall penalty structure for the new program is the same for 2011, except for taxpayers in the highest penalty category.
For the new program, the penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011.
Taxpayers participating in the new initiative must file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties.
If you would like us to file the FBAR for 2011 or for any of the earlier years, for you please provide us with the following detail for each of your overseas account:
– Name and address of the Bank or financial institution
– Account number and type of account
– Maximum balance at any time in the last calendar year
– Whether account held Jointly with another individual
When you have signature or other authority but no Financial interest in the account, you have to provide the above information and in addition provide the following details:
– Name and address of the Account holder
– Taxpayer ID of the account holder, if any
– If account holder is an organization, filer’s relationship/ Title with the organization.
If you would like to avail of the benefit of Amnesty under 2012 Offshore Voluntary Disclosure Program (OVDP/ OVDI) and would like our assistance for the purpose, please call us to make an appointment. We would be happy to assist you in these matters. We would be billing separately for our services for these services.
COMPARISON of Form 8938 and FBAR requirements
A chart providing a comparison of Form 8938 and FBAR requirements, and other information to help taxpayers determine if they are required to file Form 8938, may be accessed from the link to the IRS Foreign Account Tax Compliance Act Web page given below:
NEERAJ BHATIA, AICWA(India), FCA(India), CPA(USA)
Chartered Accountant (India) and Certified Public Accountant (USA)
US OFFICE : BHATIA & CO, INC, (CPAs), 5201 Great America Parkway, Ste 256, Santa Clara, CA 95054
Phone (408) 845 9411. Cell : (510) 435 9926 Fax (408) 351 0700. Website : www.bhatiaco.com
INDIAN OFFICE : Neeraj Bhatia & Co, Chartered Accountants, 1/5 West Patel Nagar, Main Road, New
Circular 230 Disclaimer
Any opinion or advice contained in this communication, unless expressly stated otherwise, is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties that may be imposed on the taxpayer under the Internal Revenue Code or any applicable state or local tax law or for promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.