IRS Grants Additional FBAR Filing Extension

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August 12, 2009

The Report of Foreign Bank and Financial Accounts, Form TD. F 90-22.1 (FBAR) must be filed by U.S. persons with an interest in or authority over a foreign financial account. Recently, IRS extended the June 30, 2009 filing deadline to September 23, following statements from IRS officials expanding the FBAR reporting requirement to include "foreign commingled funds", including offshore hedge funds and other investment instruments.

Notice 2009-62, published August 7, which supplements the previous extension, provides that U.S. persons who:

• have only signature authority over a foreign financial account, or

• have an financial interest in, or signature authority over a foreign commingled fund

have until June 30, 2010, to file an FBAR for the 2008 and earlier calendar years with respect to foreign financial accounts. FBAR filings for offshore investments in commingled funds held by U.S. persons are eligible for the extended deadline. However, the notice does not provide a definition "foreign commingled fund".

The notice announces the Service's intention to publish regulations clarifying the FBAR requirements. The extra time granted in Notice 2009-62 not only provides some administrative relief to certain filers, but also gives IRS additional time to solicit input and examine the issues prior to publishing further guidance.

The notice requests comments and suggested changes in reporting requirements that may reduce or eliminate FBAR filing obligations in certain circumstances. In particular, IRS seeks comments regarding a possible exemption for situations where the owner of the account files the FBAR. IRS also requests comments concerning when the filing entity only holds an interest in a foreign entity (e.g., a corporation, partnership, trust, or estate) should be subject to FBAR reporting.

Comments on Notice 2009-62 must be submitted to IRS by October 6, 2009.