Presenting a live 110 ‐ minute teleconference with interactive Q&A FBAR and FATCA Update: Latest Foreign Account Reporting Developments Account Reporting Developments New and Upcoming IRS Rules, First Form 8938 Filings, Upcoming FATCA Duties and Key Court Decision WEDNESDAY, SEPTEMBER 19, 2012 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Matthew D. Lee, Partner, Blank Rome , Philadelphia , , , p Michel Stein, Principal, Hochman Salkin Rettig Toscher & Perez , Beverly Hills, Calif. Randall Andreozzi, Partner, Andreozzi Bluestein Fickess Muhlbauer Weber Brown , Clarence, N.Y . Igor Drabkin, Principal, Holtz Slavett & Drabkin , Beverly Hills, Calif. For this program, attendees must listen to the audio over the telephone. Please refer to the instructions emailed to the registrant for the dial-in information. Attendees can still view the presentation slides online. If you have any questions, please contact Customer Service at1-800-926-7926 ext. 10 .
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FBAR and FATCA Update: Latest Foreign Account Reporting F i A t R ti Developments Seminar Sept. 19, 2012 Matthew D. Lee, Blank Rome Michel Stein, Hochman Salkin Rettig Toscher & Perez lee-m@ blankrome.com stein@ taxlitigator.com g Igor Drabkin, Holtz Slavett & Drabkin Randall Andreozzi, Andreozzi Bluestein Fickess Muhlbauer Weber Brown idrabkin@ hsdtaxlaw.com rpa@ abfmwb.com
Today’s Program Lessons Learned From First Form 8938, Revised FBAR Filings Slide 8 – Slide 25 [Mat t hew Lee] Applicable Penalties Slide 26 – Slide 40 [Michel S t ein] Slide 41 – Slide 70 Relevant IRS Regulation And Guidance Developments [Michel S t ein, Randall Andreozzi, Mat t hew Lee, Igor Drabkin] Slide 71 – Slide 73 Potential IRS Perspective On How We Got Here [Randall Andreozzi, Igor Drabkin] [Randall Andreozzi, Igor Drabkin]
N Notice i ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY THE SPEAKERS’ FIRMS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN. You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation the tax treatment or tax structure or both of any transaction without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The information contained herein is of a general nature and based on authorities that are The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
Matthew D. Lee, Blank Rome LESSONS LEARNED FROM LESSONS LEARNED FROM FIRST FORM 8938, REVISED FBAR FILINGS
Sect. 6038D Is Effective Now Sect. 6038D Is Effective Now • Sect. 6038D is a new Internal Revenue Code provision enacted as part of the Foreign Account Tax Compliance Act (FATCA), requiring annual reporting of foreign assets. • Form 8938 “Statement of Foreign Financial Assets ” must be Form 8938, Statement of Foreign Financial Assets, must be attached to the income tax return. • Temporary regulations issued on Dec. 14, 2011 and effective Dec. 19, 2011 2011 • Individual taxpayers must file Form 8938 starting with their 2011 Form 1040s, if applicable. • Filing by domestic entities has been deferred temporarily. • See www.irs.gov/fatca for updates 9
Form 8938 Form 8938 10
Who Is Required To File Form 8938? Who Is Required To File Form 8938? You must file Form 8938 if: 1. You are a “specified individual,” AND 2 2. You have an interest in “specified foreign financial assets” required You have an interest in “specified foreign financial assets” required to be reported, AND 3. The aggregate value of your specified foreign financial assets is more than the reporting threshold that applies to you. 11
Who Is A “Specified Individual”? Who Is A Specified Individual ? A specified individual is: • A U.S. citizen • A permanent resident (green card holder) • An individual satisfying the “substantial presence” test • An individual satisfying the substantial presence test • A non ‐ resident alien who makes an election to be treated as resident alien, for purposes of filing a joint income tax return with a U.S. spouse • A non ‐ resident alien who is a bona fide resident of a U.S. possession 12
What Is A “S “Specified Foreign Financial Asset”? ifi d F i Fi i l A ”? A specified foreign financial asset (SFFA) is: • Any financial account maintained by a foreign financial institution – Foreign bank accounts – Foreign mutual funds Foreign mutual funds – Foreign hedge funds – Foreign private equity funds – Certain foreign insurance products 13
Form 8938 – Part I Form 8938 Part I 14
What Is A SFFA? (Cont.) What Is A SFFA? (Cont.) • Other foreign financial assets held for investment that are not in an account maintained by a U.S. or foreign financial institution, namely: – Stock or securities issued by someone other than a U.S. person – Any interest in a foreign entity Any interest in a foreign entity – Any financial instrument or contract that has as an issuer or counterparty that is other than a U.S. person – Foreign pensions and deferred compensation plans Foreign pensions and deferred compensation plans – Foreign estates 15
Form 8938 – Part II Form 8938 Part II 16
Form 8938 – Part II (Cont.) Form 8938 Part II (Cont.) 17
Reporting Thresholds: Domestic Taxpayers D i T • Unmarried taxpayers living in the U.S. : The total value of specified f foreign financial assets is more than $50,000 on the last day of the i fi i l t i th $50 000 th l t d f th tax year, or more than $75,000 at any time during the tax year. • Married taxpayers filing a joint income tax return and living in the M i d t fili j i t i t t d li i i th U.S. : The total value of specified foreign financial assets is more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the tax year. y g y • Married taxpayers filing separate income tax returns and living in the U.S. : The total value of specified foreign financial assets is more than $50,000 on the last day of the tax year, or more than $75,000 at $ $ any time during the tax year. 18
Reporting Thresholds: Taxpayers Living Abroad T Li i Ab d • Taxpayers living abroad. You are a taxpayer living abroad if: – You are a U.S. citizen whose tax home is in a foreign country, and you are either a bona fide resident of a foreign country or countries for an uninterrupted period that includes the entire tax year; or – You are a U.S. citizen or resident who during a period of 12 You are a U.S. citizen or resident who during a period of 12 consecutive months ending in the tax year is physically present in a foreign country or countries at least 330 days. • A taxpayer living abroad must file if: – You are filing a return other than a joint return, and the total value of f l h h d h l l f your specified foreign assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year; or – You are filing a joint return, and the value of your specified foreign asset is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year. 19
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