The IRS requires filing by 6/30/09 of the Form TD F 90-22.1 (referred to as a FBAR report), for all US owners of foreign bank and foreign financial accounts.

The 5-page form is available online at http://www.irs.gov/pub/irs-pdf/f90221.pdf. The IRS packet includes "General Instructions" to help complete the form.

Additional information on completing and filing the form is available from the Internal Revenue Service, through a FAQ / Frequently Asked Questions, "FAQs Regarding Report of Foreign Bank and Financial Accounts (FBAR)" at www.irs.gov/businesses/small/article/0,,id=148845,00.html.

Background: The US Bank Secrecy Act (BSA) of 1970, also referred to as "anti-money laundering" legislation, was passed in the early 1970s when reports began to circulate of "people bringing bags full of currency of doubtful origin into banks for deposit." The BSA requires the filing of various reports meant to identify and track financial operations involved in cash operations. Illicit cash operations can include drug trafficking, illegal gambling operations and the payment of bribes. The USA PATRIOT Act, officially named the "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism," was passed in October 2001 in response to the events of 9/11/01. Among its provisions is a requirement to ensure compliance with BSA filing requirements. The call for enhanced reporting requirements was due in part to reports that the terrorist attacks of 9/11 involved financing of roughly US $400,000 to $500,000 for the terrorists' activities in the US. This financing had never been tracked but was suspected of being subject to disclosure under US law. More recent developments, including investigations related to the Liechtenstein Land Bank (Liechtenstein) and UBS (Switzerland) operations in the US, have indicated significant funds have been deposited in foreign bank accounts to evade the payment of US taxes.

Filing Address: Detroit, Michigan. This form is separate and distinct from filing a taxpayer's annual tax return. See the IRS FAQ mentioned above for the specific address for filing the FBAR form.

Enforcement: Penalties for failure to file FBAR forms can include civil penalties and criminal penalties. These penalties are separate from penalties related to failure to pay applicable federal taxes. The IRS can assess civil penalties up to 6 years after a FBAR form is due.

Recommendation: "US persons" to whom this law applies includes US citizens, US residents, US business entities, and US estates or trusts. Consultation with personal accountants or attorneys is recommended, to ensure compliance with requirements for the filing of current and prior FBAR forms.

© Copyright - Smith Brandon International, Inc.

Smith Brandon International, Inc. conducts international investigations and provides actionable business intelligence and risk avoidance counsel to assist companies in their overseas operations. The firm's principals are grounded in investigative, analytical, and intelligence gathering techniques, drawing on decades of experience in the FBI, State Department, intelligence circles and the private sector. For more information, please call 202-887-9363, or visit our website at http://www.smithbrandon.com/.