Skip to Main Content
 

More Foreign Financial Account Reporting

March 26, 2010, Caplin & Drysdale Tax Alert

As anticipated in our March 12, 2010 Tax Alert ("Looking for FBARs in All the Wrong Places?"), some pertinent legislative proposals were just enacted as part of the HIRE (Hiring Incentives to Restore Employment) Act, signed by President Obama on March 18th. The HIRE Act contains a new set of reporting rules, and related penalties, with respect to certain foreign financial assets. The rules go into effect in 2011.

The HIRE Act provision requires an individual "holding any interest" in a specified foreign financial asset to attach pertinent information to his or her tax return if the aggregate value of such assets exceeds $50,000. Specified foreign financial assets are:

    • Financial accounts maintained by a foreign financial institution 
    • The following assets not held in an account maintained by a financial institution:
      • Any stock or security issued by a foreign issuer
      • Any financial instrument or contract held for investment with a foreign issuer
        or counterparty
      • Any interest in a foreign entity

The new requirements are broader in some respects (e.g., types of assets) than the FBAR rules described in our recent Tax Alert, and narrower in others (e.g., dollar threshold, individuals only), and the reporting is on the individual tax return, not an FBAR form. The scope of the term "holding any interest" remains to be seen. Regulations may be issued to avoid duplicative disclosures.

The contours of these important new requirements will unfold in coming months. For the moment, we just wanted to alert you to their existence. The HIRE Act also contains other new provisions, e.g., regarding income tax withholding by financial intermediaries, designed to ferret out offshore non-compliance.

For more information please contact the following attorneys:
Scott D. Michel at 202-862-5030 or sdm@capdale.com
Patricia Gimbel Lewis at 202-862-5017 or pgl@capdale.com
Richard W. Skillman at 202-862-5034 or rws@capdale.com
James E. Salles at 202-862-5012 or jes@capdale.com

Caplin & Drysdale
Washington, D.C. Office: One Thomas Circle N.W., Suite 1100, Washington, D.C., USA 20005
PH: +1 202-862-5000 FX: +1 202-429-3301

New York Office: 375 Park Avenue, 35th Floor, New York, New York, USA 10152
PH: +1 212-319-7125 FX: +1 212-644-6755
www.caplindrysdale.com

© 2010 Caplin & Drysdale, Chartered
All Rights Reserved.

Caplin & Drysdale provides a full range of tax and legal services to companies, organizations, and individuals throughout the United States and around the world. The firm also offers exempt organizations counseling, employee benefits counseling, corporate law counseling, political activity law counseling, white collar defense, and complex civil litigation services.

This alert is intended as a summary of legal issues for your general information. It does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2019 Caplin & Drysdale, Chartered
All Rights Reserved.