Latest news with #ReportofForeignBankandFinancialAccounts
Forbes
13-04-2025
- Business
- Forbes
The Hendler Case: FBAR Penalties Survive Beyond Death
Death doesn't erase FBAR penalties. Noncompliant taxpayers leave a problem to their estate which ... More may simply inherit the liability. This leaves beneficiaries in a state of peril as well. A recent decision reminds taxpayers and the tax compliance community of the importance of filing the Report of Foreign Bank and Financial Accounts. The U.S. District Court for the Southern District of New York in United States v. Hendler, 23 Civ. 3280 (Sept. 17, 2024) has clarified the enduring nature of penalties tied to FBAR. The court held that FBAR penalties 'accrue' on the date the form is due (but fails to be filed) and not when the IRS assesses the penalties which might be years later and after the taxpayer has died. The court also determined that an individual's death does not extinguish these obligations or render them excessive under the Eighth Amendment. Adding another layer to the ruling, the court found that the government was not time-barred from assessing these penalties, thanks to the taxpayer's agreement, while still alive, to extend the statute of limitations. The Hendler case revolves around David Benishai, a U.S. citizen who held financial interests in multiple bank accounts in Israel from 2004 to 2010. Benishai failed to timely file FBARs as required by the Bank Secrecy Act. Mr. Benishai later filed delinquent FBARs and agreed to extend the statute of limitations for the IRS to assess penalties. He passed away a few months before the IRS finalized its assessment. Benishai's estate, administered by his wife Hanna Hendler, challenged the assessment of 'nonwillful' penalties which IRS had assessed at $10,000 per form per calendar year in line with the U.S. Supreme Court landmark decision. The estate argued that the FBAR penalties could not be enforced after his death, that the statute of limitations had expired, and that they violated constitutional protections. The district court rejected these claims, delivering a ruling with significant implications for taxpayers and their estates. A key element of the Hendler ruling was the court's determination that FBAR penalties 'accrue' on the date the FBAR form is due. What does this mean in practice? Unlike penalties that might depend on an agency's action such as an assessment, FBAR penalties are tied to the moment of noncompliance. For each year an individual fails to file an FBAR by its due date (now April 15 of the following calendar year, with an automatic six-month extension to October 15), a liability is created. This liability doesn't require the IRS to act immediately; it exists as a latent obligation from that due date onward. In Benishai's case, his FBARs were due annually between 2005 and 2011 for the calendar years 2004 through 2010. Because he was alive on those due dates and failed to file, the penalties accrued then and not at the later time after his death when the IRS assessed them. The court likened this to tax deficiencies, which arise by operation of law when a return is due but not filed, requiring no formal assessment. Even though Benishai died in 2021 and the IRS assessed the penalties posthumously, his FBAR liability had already crystallized years earlier while he was alive and failed to file the forms when due. This interpretation means the IRS can pursue these penalties against an estate long after the taxpayer's death, provided it acts within the statutory timeframe. While the IRS may face greater hurdles in FBAR penalty collection, it has various means to ensure payment. The estate argued that assessing the nonwillful FBAR penalties after Benishai's death extinguished the claim or violated due process and the Eighth Amendment's Excessive Fines Clause. The court disagreed. It found that FBAR penalties are primarily 'remedial', designed to compensate the government for the costs of investigating noncompliance and to enforce tax collection. FBAR penalties are not purely punitive and designed to punish the taxpayer. When a penalty is remedial in nature, the penalty can survive the taxpayer's death. Various precedent was cited by the Hendler court that supported this view, affirming that estates remain on the hook for accrued FBAR violations. As an aside, even 'willful' FBAR penalties have been found to be 'remedial' and survive death, despite the huge penalty amounts involved. The Eighth Amendment challenge that the penalties were excessive was also unsuccessful. The estate claimed any fine against a deceased person is inherently excessive, but the court found no legal basis for this blanket assertion. The court declined to rule definitively on whether the Excessive Fines Clause applies to FBAR penalties, but it made clear that death alone doesn't render a penalty unconstitutional. The estate's final defense was that the FBAR six-year statute of limitations barred the IRS' 2021 assessment. This argument was undermined by Benishai's own actions. The Bank Secrecy Act provides the government six years from the due date to assess FBAR penalties, but taxpayers can extend this period by agreement with the IRS. While Benishai was alive, he signed extensions pushing the deadline beyond his death to December 31, 2021. Since the IRS assessed the penalties in April 2021 this assessment was well within the extended window. The estate's argument that such extensions are invalid lacked supporting authority, and prior cases have consistently recognized their legitimacy. The Hendler decision reminds us that FBAR obligations don't vanish with the taxpayer's death. For individuals with unreported foreign accounts, the accrual of penalties on the due date means liability begins ticking the moment they miss a filing, whether the IRS catches it during their lifetime or not. Estates can inherit these debts, facing enforcement actions years later. If beneficiaries receive assets tied to unreported foreign accounts, they could inadvertently become entangled in ongoing compliance issues or audits, exposing them to further legal and financial risks. For tax pro's, wealth advisers and estate planners, the Hendler decision is a reminder to investigate potential FBAR liabilities when managing a decedent's affairs. Consider a taxpayer who failed to file an FBAR for a $50,000 Swiss account by April 15, 2018 (for the 2017 tax year), with the automatic extension expiring October 15, 2018. If they died in 2020 without extending the statute of limitations, the IRS could still assess a $10,000 penalty against their estate as late as October 15, 2024, six years from the due date. FBAR rules can be, and are, enforced beyond the grave. By tying penalty accrual to the FBAR due date and upholding penalty survival post-death, the Hendler court has closed loopholes that might have let estates escape a decedent's FBAR penalties that are not assessed during his lifetime. Taxpayers who are not compliant leave a problem to their estate which may simply inherit the liability. As foreign account scrutiny intensifies, this decision serves as both a warning and a call to action. There are many avenues to rectify FBAR noncompliance and often, without any penalty being imposed. Stay on top of tax matters around the globe. Reach me at vljeker@ Visit my US tax blog It is an invaluable guide in all areas of U.S. international tax. Stay on top of legislative developments and tax reform (including FBAR developments) and keep ahead of U.S. tax changes impacting your life, family or business.
Forbes
22-03-2025
- Business
- Forbes
Tax Breaks: The Keeping Your Sanity And Surviving Tax Season Edition
One way to keep sane during tax season? Take short breaks. Tax Day is less than a month away. Are you ready? If the IRS tax filing statistics are any indication, taxpayers still aren't rushing to file. Numbers for tax filing and processing of tax returns dipped again (☆), a trend that hasn't changed since the season opened on January 27, 2025. Some taxpayers may be waiting to file–there's still plenty of time. Others may be looking to file an extension. (☆) It's free and easy and can help ensure a complete, correct return. Taxpayers sometimes push back, insisting that filing for an extension will cause a return to be flagged for audit. Not only do the statistics not bear this out, but it doesn't make good sense: I maintain that it's always better to file a complete, correct return on extension than a rushed, flawed return by Tax Day. Filing for extension will give you an extra six months–until October 15, 2025–to file your tax return. Just don't forget to make a payment with your extension–it extends your time to file but not the time to pay. Your payment is still due on or before April 15, 2025. U.S. persons with foreign financial accounts may also need to file a Report of Foreign Bank and Financial Accounts, or FBAR. The filing deadline is April 15, the same due date as one's U.S. income tax return, but there is an automatic extension to October 15 if the initial FBAR deadline is missed. No separate extension request is required. For tax year 2024, the FBAR must be filed by April 15, 2025, with the automatic extension pushing the final due date to October 15, 2025. If you're expecting a refund as a result of your tax return, pay close attention to the mail (more on that in a bit) and to your benefits. The Social Security Administration will resume (☆) attempts to recover overpayments through the Treasury Offset Program—attempts that had been suspended since March 2020 due to COVID. The program allows the Treasury to withhold tax refunds, among other payments. The agency will also begin withholding 100% of benefits checks to make up for any overpayments. That's up from the current rate of 10% that the Biden Administration put into effect in March 2024 after growing public attention to the hardship caused by 100% withholding. It's particularly problematic for those for whom Social Security is the primary source of income. Crucially, the 100% withholding rate will not apply to beneficiaries with an overpayment prior to March 27. Their rate will remain 10%. In addition, the withholding rate for beneficiaries of Supplemental Security Income (SSI)—the minimum payments made to poor seniors and people with disabilities—will remain 10%. The overpayment withholding rate—often called a clawback—allows the government to recover 'improper' payments. By definition, improper payments can be overpayments (when SSA pays someone more than they are due) or underpayments (when SSA pays someone less than they are due). According to a report from the Social Security Administration's Office of the Inspector General, for the fiscal years 2015 through 2022, SSA estimates it made nearly $72 billion in improper payments, most of which were overpayments. That represents 0.84% of total Social Security payments during that time. Here's something else to keep an eye out for. Sadly, scammers are also taking advantage of unemployment benefits. (☆) Over the last few years, taxpayers have reported receipt of unemployment-related tax forms when they did not apply for benefits. If you've received a Form 1099-G that shows you received unemployment benefits you never received, someone may have used your name and personal information to apply for benefits. In that case, you'll want to make a report to the state. And the IRS advises that when you file your taxes, you should only include income you received—the processing of your tax return should not be delayed while your report of unemployment identity theft is under investigation. With all of that to consider, it's no wonder that most Americans don't look forward to Tax Day. A recent Wallet Hub survey found that nearly a third of taxpayers would rather serve on jury duty than do their taxes. Nearly one in eight taxpayers would rather talk to their kids about sex than do taxes, while one in 20 would rather drink expired milk. Rashelle Isip, a New York City-based productivity consultant and time management coach, has literally written the book on time management: The Order Expert's Guide to Time Management. Isip says that the first step to surviving tax season is understanding that it won't last forever. To make the process less stressful, Isip recommends that you not tackle the whole project at once. "Break it into pieces," she says, offering a sample to-do list. (☆) Isip also suggests introducing short breaks, like taking a class at the gym or going for a walk, into your routine. It can be hard to convince yourself to take a physical break, but Isip says that it can help to get out of your head and get your body moving. Then she says, take a quick moment of reflection and think about how you felt. You might be surprised at the results. It's not unusual, for example, for you to think, "Going for a walk felt good—and now I see the error in my spreadsheet." "There is," Isip explains, "always work to do. Always." Taking a step away is essential, and while it seems counterintuitive, a break can actually increase your productivity. Me? My breaks typically involve baking (my sourdough starter, Doughly Parton, needs daily attention), gardening (if you've seen my office, you know it's full of plants), or a quick run. Some of you have chimed in to tell me how you take a break–I'd love to hear more. Enjoy your weekend, Kelly Phillips Erb (Senior Writer, Tax) Articles marked with (☆) are premium content and require you to log-in with your Forbes membership credentials. Not a subscriber yet? Click here to sign up. Taylor Swift Eras tickets (Photo by) This week, a reader asked: I received a 1099-K, but the amount on the form is wrong. It includes more money than I received for my business. What do I do? Form 1099-K is used to report certain payment transactions when, for the tax year 2024, payments totaling more than $5,000 are settled (☆) through a third-party network including payment apps like PayPal and online marketplaces like Etsy. No threshold applies to payment card transactions—payment cards include credit, debit, or stored value cards such as gift cards–if you received $1 of payments from a payment card transaction, you should receive a Form 1099-K for those payments. However, just because a payment is reported on a Form 1099-K does not mean it is taxable. (Similarly, a payment that was not reported on a Form 1099-K can still be taxable–it depends on the nature of the payment.) For example, payments made through a third-party network for a birthday or holiday or wedding gifts; for sharing the cost of a car ride or meal; or for paying a family member or roommate for a household bill aren't taxable. These payments should not be reported on Form 1099-K. If you get a mistaken 1099-K for one, that doesn't make them taxable. The casual sale of goods and services, including selling used personal items like clothing, furniture, and other household items for a loss, could properly generate a Form 1099-K for many people, even if the seller has no tax liability from those sales. Most sales of personal items result in a loss (sadly, the loss on the sale of a personal item is not deductible), but on the chance that you have a gain, you'll report it as you would any other capital gain on Schedule D. That applies to those Taylor Swift tickets that you sold for a gain, too. That gain is taxable, even if you're not in the business of selling Eras Tour tickets—and you may well receive a Form 1099-K. As you'd expect, transactions in the course of business are taxable–even if that business is only selling the sweaters and scarves you knit. They are also reportable on Form 1099-K. Each payment app or online marketplace will have its own processes for categorizing payments. If you use the same platform for business and personal items, you could have some mixed reporting. The IRS encourages you to review the policies of any apps or online marketplaces you use to make sure that your transactions are reported appropriately. If you still have a question about your Form 1099-K or believe that your Form 1099-K needs to be corrected, you should contact the entity that filed the Form 1099-K. The contact information is generally in the upper left corner of the form. If you don't recognize that name, contact the payment settlement entity (PSE) whose name and phone number are shown in the lower-left corner of the form above their account number. Don't wait to file your tax return if you can't get a corrected Form 1099-K. You can simply adjust the error when you file. You'll make the adjustment on Schedule 1 of your Form 1040 as follows: The IRS has a dedicated webpage, Understanding Your Form 1099-K, for more information. — Do you have a tax question or matter that you think we should cover in the next newsletter? We'd love to help if we can. Check out our guidelines and submit a question here. As consumer confidence falters, government layoffs dominate the news and recession warning signs start blinking, it's smart to think about what you might do if you need additional cash. One source Americans consider tapping in an emergency or when they're otherwise short of cash? Retirement accounts. (☆) It makes sense, since for many workers, retirement accounts represent most of their liquid savings. In general, a retirement plan can begin distributing money after a participant reaches a certain age—usually 59-1/2. If you take funds earlier, you usually must pay a 10% penalty (some exceptions apply, keep reading) in addition to normal federal income tax on the distribution. Truth is, the rules on early withdrawals are complicated and seem to be constantly changing. Here's a handy, quick-look table with some of the exceptions: A quick look at exceptions to tax on early distributions. A former U.S. Postal Service employee was found guilty of stealing checks, including tax refund checks, from customers on his route. (Photo by) Waiting on your tax refund? In 2023, the IRS issued 120.9 million refunds, amounting to more than $461.2 billion. Last year, nearly 91% of all refunds were issued by Direct Deposit—so far this season, nearly 97% of refunds have been issued by Direct Deposit. The IRS encourages taxpayers to use Direct Deposit, claiming it's the easiest, safest and fastest way to receive your refund. A recent criminal case (☆) offers a cautionary tale to drive home that point. A former U.S. Postal Service employee was found guilty of stealing checks, including tax refund checks, from customers on his route. According to court documents, Hachikosela Muchimba was a mail carrier assigned to Route 23 at the Friendship Post Office Station in Washington, D.C. Over two years, he stole checks from the mail intended for delivery to residents on his route. At least 90 of the checks were U.S. Treasury checks, including tax refunds. Muchimba deposited nearly 100 checks worth over $1.6 million into several banks. In some instances, Muchimba altered the checks by removing the payee's name and replacing it with his name. Bank surveillance footage captured images of him making deposits and withdrawing funds—in some of the footage, he's wearing his U.S. Postal Service work clothes. Muchimba proved to be his own worst enemy. A postal customer provided law enforcement with a copy of an altered check. Remarkably, the customer recognized the name and the address on the check as the same that his mail carrier, Muchimba, had used on a holiday card sent to residents on his mail route the previous December. On March 13, 2025, a jury found Muchimba guilty of 20 counts, including conspiracy to commit theft of mail and bank fraud, theft of mail, bank fraud, engaging in a monetary transaction in property derived from specified unlawful activity, and unlawful procurement of citizenship or naturalization. His sentencing is scheduled for August 8, 2025. He faces up to 30 years in prison for bank fraud and five years for mail theft. 📅 April 1, 2025. Deadline for retirees who turned 73 in 2024 to begin receiving required minimum distributions (RMDs) from IRAs, 401(k)s and other retirement plans. Under a special rule, IRA owners and participants born after December 31, 1950, and who turned 73 in 2024, can delay their first RMD until April 1, 2025. The April 1 deadline is for the first year only–for subsequent years, the distribution is due by December 31. Further, taxpayers receiving their first required distribution for 2024 in 2025 (by April 1) must take their second RMD for 2025 by December 31, 2025. 📅 April 15, 2025. Due date for most taxpayers to file an individual tax return—or apply for an extension. 📅 May 1, 2025. Due date for individuals and businesses in the entire states of Alabama, Georgia, North Carolina, and South Carolina and parts of Florida, Tennessee, and Virginia affected by severe storms and flooding from Hurricane Helene (☆) and Hurricane Milton. 📅 September 30, 2025. Due date for individuals and businesses impacted by recent terrorist attacks in Israel. 📅 October 15, 2025. Due date for individuals and businesses affected by wildfires and straight-line winds in southern California that began on January 7, 2025. Currently, individuals and households that reside or have a business in Los Angeles County qualify for tax relief. 📅 May 8-10, 2025. American Bar Association Section of Tax May Meeting. Marriott Marquis Washington, DC. Registration required. 📅 May 13-14, 2025. National Association of Enrolled Agents 2025 Capitol Hill Fly-In, Washington, DC. Registration required (NAEA members only). 📅 June 16-19, 2025. Latino Tax Fest. MGM Grand Hotel & Casino, Las Vegas, Nevada. Registration required. 📅 July 18-19, 2025. Tax Retreat 'Anti Conference'. Denver, Colorado. Registration TBA. 📅 July 21-23, 2025. National Association of Tax Professionals Taxposium 2025, Caesars Palace, Las Vegas, Nevada. Registration required. What invention, designed to increase IRS efficiency, was described as looking like 'an octopus carrying 10 dinner trays'? (A) Devil Desks (B) Exception Mail Stops (C) Flat Tubs (D) Tingle Tables Find the answer at the bottom of this newsletter. In a letter to Congressional leadership in the Senate Finance and House Ways & Means Committees, the American Institute of CPAs (AICPA) highlighted a number of legislative proposals directly related to possible changes to the tax rules. The 2025 tax priorities outlined in the letter included several proposals from the AICPA's 2025 Compendium of Tax Legislative Proposals – Simplification and Technical Proposals, which included 69 suggested simplification of and technical changes to provisions in the Internal Revenue Code. Gary Shapley has been named deputy chief for IRS Criminal Investigation (IRS-CI), starting March 19. In his new role, Shapley will oversee 20 field offices and 14 foreign posts, including more than 2,000 special agents investigating tax fraud and other financial crimes. Fried Frank announced that Oliver Currall will join the firm as a partner in the Tax Department in London. Currall advises on UK and international tax structuring, with a particular focus on cross-border private equity and M&A transactions, and the structuring and operation of global investment funds. He provides tax advice to major private equity sponsors on their deals and to asset managers on the operation of UK management company and asset holding structures. Temple Low Income Taxpayer Clinic, an academic clinic at Temple Beasley School of Law, is accepting applications for a summer intern (the internship is paid or you can get academic credit). The clinic is a great opportunity to work with low-income clients to help them navigate tax disputes and change their lives. To apply, email a paragraph describing your interest and a resume by Monday, May 9. — If you have tax and accounting career or industry news, submit it for consideration here or email me directly. Here's what readers clicked through most often in last week's newsletter: You can find the entire newsletter here. The answer is (D) Tingle Tables. An employee at the IRS Ogden Service Center sorts tax forms at a "Tingle table", named for its inventor. (Photo by Roger Ressmeyer/Corbis/VCG via Getty Images) Tingle Tables are named for Jim Tingle, the former IRS employee who invented them in 1962, building the prototype in his backyard. In 1989, the New York Times said the desk looked like 'an octopus carrying 10 dinner trays,' noting that it was used to sort federal income tax returns. That's because the desk featured a U-shaped surface with 18 to 25 hanging baskets—that's where the IRS employees who open tax returns began sorting. The design allowed employees to break down as many as 1,500 returns a day. The design is so iconic that a Tingle Table is held for display by the National Museum of American History. As for the other choices? Exception mail stops are a designation used by the IRS to direct mail. Flat Tubs are actually used by the U.S. Postal Service. They are the white tubs used to hold and transport various types of mail, especially flats. And Devil Desks? That's just something I made up. How did we do? We'd love your feedback. If you have a suggestion for making the newsletter better, submit it here or email me directly.
Forbes
21-03-2025
- Business
- Forbes
FBAR Due Date: Triggers And Key Compliance Rules For U.S. Taxpayers
FBAR obligations are confusing. They are due the same date as tax returns-April 15, but have an ... More automatic 6 month extended due date. Nonetheless, accurately answering the foreign account question on Schedule B of the tax return is critical and can have significant legal consequences. As the April 15 tax filing deadline approaches, U.S. persons with foreign financial accounts must be aware of their obligation to file the Report of Foreign Bank and Financial Accounts, commonly called the 'FBAR'. The filing deadline is April 15, the same due date as one's U.S. income tax return, but there is an automatic extension to October 15 if the initial FBAR deadline is missed. No separate extension request is required. For tax year 2024, the FBAR must be filed by April 15, 2025, with the automatic extension pushing the final due date to October 15, 2025. U.S. taxpayers must answer the foreign account question on Schedule B, Part III of their Form 1040 tax return, even if no separate Schedule B is required for other reasons (such as receipt of dividends or interest). Taxpayers may be filing their U.S. income tax returns by April 15 and not giving full thought to the need to file an FBAR, given its automatic extended due date. Nonetheless, accurately answering the foreign account question on Schedule B is critical, as it can have significant legal consequences. This question puts a taxpayer on notice as to the possible duty to file an FBAR. A taxpayer who fails to disclose a foreign financial account by incorrectly answering "no" on Schedule B's check-the-box question may be at risk of being found willful in their failure to file an FBAR. The distinction between willful and non-willful noncompliance is crucial because willful violations carry substantially higher penalties and potential criminal liability. An inaccurate response on Schedule B can be used as evidence of willfulness, making it essential for taxpayers to answer truthfully and carefully. Some taxpayers mistakenly assume that FBAR filing applies only to individuals who hold foreign bank accounts in their own name. However, the FBAR requirements are broad and cover far more than bank accounts and direct ownership situations. U.S. person must file an FBAR if they have 'a financial interest in or signature authority over' one or more foreign financial accounts and if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year. Understanding financial interest and signature authority is key to determining whether a filing obligation exists. A financial interest in a foreign account can arise in multiple ways. The most straightforward case is when a U.S. person is the owner of the account, either individually or jointly. In the case of nominees, a U.S. nominee holding a foreign account for another person will have FBAR obligations since title to the account is in the name of the U.S. nominee regardless of the fact the nominee has no beneficial interest in the account. Additionally, a financial interest may exist when an account is held by a nominee or agent who is acting on behalf of a U.S. person. Even though the U.S. individual is not the legal account holder, FBAR duties may arise since the account is being held on his or her behalf. Account ownership is not the only basis for FBAR reporting. A financial interest in a foreign account can arise by indirect ownership including when a taxpayer owns more than 50% (by vote or value) of a corporation, partnership, or other entity that itself holds a foreign account. For instance, if a U.S. taxpayer owns 60% of a foreign corporation, they are treated as having a financial interest in all of that corporation's foreign accounts, even if the accounts are not in their name. By contrast, a U.S. person who owns only 30% of a partnership does not have a financial interest in the partnership's accounts for FBAR purposes. FBAR complexities multiply when trusts are holding foreign accounts. Trust relationships create potential reporting obligations for the various parties involved with the trust – the trust creator, the trustee, and the trust beneficiaries. A U.S. trustee would invariably have FBAR duties with respect to the trust's foreign accounts, whether based on having a financial interest or signature authority over the accounts. A U.S. person who is the grantor of a trust and retains an interest in its assets has a financial interest in the trust's foreign accounts raising FBAR obligations. Similarly, absent a narrow exception, FBAR duties arise for a U.S. beneficiary who has a greater than 50 percent present beneficial interest in the assets or income of the trust for the calendar year. Since FBAR is an annual form, careful monitoring is especially important when U.S. beneficiaries receive trust distributions. For example, if a beneficiary receives 60% of the trust income in the year in question, the beneficiary would have a financial interest in the trust's foreign accounts for FBAR purposes for that particular year. Separate from financial interest, signature authority over a foreign financial account can also trigger FBAR filing. A U.S. person has signature authority if they have the power—alone or jointly with others—to control the disposition of account funds through direct communication with the financial institution. This type of authority would typically apply to corporate officers with control over company accounts, employees authorized to approve account transactions, and individuals who hold online banking credentials that allow them to execute transactions. While the individual may not own the account or otherwise have a direct financial interest, simply having the power to control transactions online with a login and password can be enough to trigger an FBAR reporting requirement. Having a power of attorney over financial transactions that involve foreign accounts might also give the power holder FBAR signature authority. When a POA is granted with respect to financial transactions, it typically provides the holder with the authority to control the disposition of assets held in a financial account. Even if the authority is never exercised, FBAR filing would be required assuming the $10,000 threshold was met. Many U.S. taxpayers overlook FBAR filing, often under the mistaken belief that they are exempt because they do not personally hold a foreign account. However, indirect ownership and signature authority can create an FBAR obligation. Tax season is here. Taxpayers should review their foreign account holdings to ensure they accurately answer the foreign account question on Form 1040, Schedule B and file FBARs to avoid potential penalties. Stay on top of tax matters around the globe. Reach me at vljeker@ Visit my US tax blog It is an invaluable guide in all areas of U.S. international tax, keeping you ahead of US tax changes impacting your life, family or business. There is a separate category dedicated to FBAR.
