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FOREIGN ACCOUNT JUNE 30 DEADLINE LOOMS

June 24, 2008

Do you have a foreign bank account? Do you have signature authority over a foreign bank account at work? If so, you may have a deadline coming up.

The IRS has a friendly reminder:

U.S. persons are required to file a Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1, each year if they have a financial interest in or signature authority or other authority over any financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.

These things can surprise you. Some online gaming accounts qualify for this reporting, for example. Also, a U.S. employee who can sign checks on the company's Candian bank account may also need to file this form. The June 30 due date cannot be extended.

Why file?

Civil and criminal penalties for non-compliance with the FBAR filing requirements are severe. Civil penalties for a non-willful violation can range up to $10,000 per violation. Civil penalties for a willful violation can range up to the greater of $100,000 or 50 percent of the amount in the account at the time of the violation. Criminal penalties for violating the FBAR requirements while also violating certain other laws can range up to a $500,000 fine or 10 years imprisonment or both. Civil and criminal penalties may be imposed together.

In other words, failing to file FBAR may leave you FUBAR.

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