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October 15 looms!

October 13, 2009

Tax season really ends Thursday at 11:59:59 pm, when the extensions for 2008 1040s expire. That's also when the truly, positively final deadline for participating in the IRS offshore account amnesty runs out. Unless, of course, you qualify for an extension to next June 30.

We got a comment last night to a post that shows how the current regime of offshore account reporting puts some taxpayers between a rock and a hard place:

What is the position where you are a US citizen married to a non-US citizen spouse and residing outside the US and an employee of a legitimate foreign business in which you have the authority to write checks on office accounts but do not have access to the business' bank statements and in fact do not know the total that is in the account. Also, to make it worse once you tell the employer that because they were unfortunate enough to hire you, an American citizen, they now need to disclose to you the account balances so you can report this to foreign tax authorities (the IRS), they refuse. Can you blame them though? Good luck other americans looking for any executive jobs outside the USA! This is ridiculous. Why does the IRS treat citizens abroad like this? Clearly we cannot use US bank accounts to pay our salaries in and pay our bills, etc.

Even the IRS seems to realize that the requirement to report foreign accounts that you can sign checks for, but don't own, is dumb. Notice 2009-62 extended the FBAR amnesty deadline for such filers to June 30, 2010, with this explanation:

In light of the additional time needed for the Department of the Treasury to address issues pertaining to FBAR filing requirements and the need to provide administrative relief for (i) persons with signature authority over, but no financial interest in, a foreign financial account, and (ii) persons with a financial interest in, or signature authority over, a foreign commingled fund, this Notice provides that those persons have until June 30, 2010, to file an FBAR for the 2008 and earlier calendar years with respect to these foreign financial accounts. Thus, eligible persons that avail themselves of the administrative relief provided in this Notice may need to file FBARs for the 2008, 2009 and earlier calendar years on or before June 30, 2010, to the extent provided in future guidance.

More on the October 15 deadlines from Kay Bell, TaxGrrrl, and The New York Times.