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New FATCA Foreign Financial Assets Reporting, Form 8938, and Updated Foreign Bank Account Reports, TD F Form 90-22.1: Seeing Double? Sadly, No.

New FATCA Foreign Financial Assets Reporting, Form 8938, and Updated Foreign Bank Account Reports, TD F Form 90-22.1: Seeing Double? Sadly, No.
Product Code - TMA62
Speaker(s): Charles M. Bruce, Moore & Bruce, LLP (Partner) and Bonnard Lawson (Counsel), and Stanley C. Ruchelman, The Ruchelman Law Firm (Member)
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 New FATCA foreign financial assets disclosure rules require reporting that, at first blush, looks like FBAR reporting. But this is a whole new set of tax reporting rules that in many, if not most, cases will overlap and duplicate the Bank Secrecy Act (FBAR) rules. The FATCA disclosure rules are found in new section 6038D, which underpins new IRS Form 8938 (Statement of Certain Foreign Financial Assets). These rules are effective for taxable years beginning after March 18, 2010. Taxpayers affected will need to file this form for first time with their 2011 federal tax returns! The existing Foreign Bank Account Report (TD F 90-22.1) is not replaced by new Form 8938. If need be, both are filed.

These two sets of rules — colloquially, “Tax-FBAR” and “FBAR” — to a large degree overlap, and duplicative reporting is definitely possible; in fact, it may be the rule of the day.

Return preparers need to pay close attention. If in the past you have not prepared the taxpayer’s FBARs but let them to the client, this will change. Return preparers will have to prepare the Form 8938 because it’s part of the income tax return. The preparer will be signing off on this as with any other attached statement or schedule. It’s hard to imagine preparing this form and not the FBAR form.

Assume that Form 8938 and TD F 90-22.1 data will be run through a program matching information from both.

If you advise clients that have foreign assets, e.g., bank accounts, investments, companies, other, you will want to learn about this Brave New World.

Presentation Objectives:

The objectives of this 60-90 minute audio discussion include providing participants with an understanding and practical application of the following. We’ll start with FBAR, follow with FATCA and end with a review of what overlaps and what does not.

I. FBAR Disclosure

  1. Overview — What is FBAR? What are its underpinnings? Who administers it? Who enforces it? What is the information used for? What are the surrounding “realities”?
  2. TD F 90-22.1 (Foreign Bank Account Report; (Rev. November 2011). Strolling through the recent final regulations (March 28, 2011). Who must file? US person? Reportable accounts (not just bank and brokerage accounts)? What is a financial interest (not just owner of record or title holder; indirect ownership; trusts and estates)? Signature power or other authority? Special rules for publicly-traded companies? Spouses, co-signatories, marital property? Problem areas.
  3. How to deal with delinquent and amended FBARs. Voluntary Disclosure Programs — insights.
  4. Penalties — Hold on to your hat.
  5. What changed with final FinCEN regulations and what’s noteworthy? Disregarded entities. Individuals doing business in US but not an NRA. Short-duration accounts. Accounts in connection with transaction closings. Mutual funds. Insurance policies. Private hedge fund accounts. Accounts owned by grantor trust. Accounts owned by nongrantor trusts — situation for beneficiary. Implications if there is a trust protector.
  6. Treatment of beneficiaries of wholly discretionary trust. Treatment of different fact situations involving ownership of gold — physical gold (bullion) and other forms.

II. FATCA Disclosure

  1. New section 6038D (Statement of Certain Foreign Financial Assets ). Introduction. Where did this come from? How does this differ from FBAR reporting?
  2. Status of IRS guidance — Form 8938 and Instructions.
  3. How to comply.
  4. Problem areas.
  5. Special issues for return preparers. Practical fallout.

III. Laying FBAR Alongside FATCA Disclosure

  1. A point-by-point comparison of the two regimes.

Upon completion of this program, participants will be able to:

  • Determine applicability of FBAR filing requirements.
  • Advise how to complete FBAR Form 90-22.1.
  • Determine applicability of new section 6038D disclosure requirements.
  • Advise how to complete new Form 8938.
  • Recognize problem areas.

The 1 hour presentation will be followed by questions and answers lasting approximately ½ hour.

Level: Intermediate to Advanced
Delivery Method: Group Live; followed by Q & A
Recommended CPE Credit: 1 credit

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Cancellation policy

To cancel your registration for this event, you must contact Customer Service (800-372-1033, option 6, Mon.-Fri., 8:30am-7pm ET, excluding most federal holidays) no later than 24 hours prior to the scheduled start of the audioconference. You will receive a CD or tape of the Audioconference or a credit valid for one year. Your credit may be applied toward the purchase of any BNA product or audioconference.

Charles M. Bruce, Moore & Bruce, LLP (Partner) and Bonnard Lawson (Counsel), and Stanley C. Ruchelman, The Ruchelman Law Firm (Member)

Charles M. Bruce is partner in Moore & Bruce, LLP (Washington, DC) and Counsel in Bonnard Lawson (Lausanne Office). He specializes in international tax, corporate transactions and financings. He is known for his work in the private client areas of trusts and estates and tax compliance. Formerly Tax Counsel, US Senate Committee on Finance; Adjunct Professor of Law, Graduate Law Program, Georgetown University Law Center; Visiting Professor, Institut für Ausländisches und Internationales Finanz- und Steuerwesen (International Tax Institute), Hamburg University. Member of the American Bar Association, International Bar Association, International Fiscal Association (US and UK Branches), the Society of Trust and Estate Practitioners, and the International Tax Planning Association. Mr. Bruce sits on the Board of Directors of a number of corporations and charitable foundations. He is General Counsel of a privately held investment company. He divides his time between Washington, DC, London and Lausanne.

Stanley C. Ruchelman is a member of The Ruchelman Law Firm. His practice concentrates on tax planning for cross border transactions. He has authored numerous monographs on international taxation for a variety of publications and treatises. In addition, Mr. Ruchelman is a frequent lecturer on this subject, having spoken at the Practicing Law Institute, New York University Tax Institute, the American Bar Association, the International Fiscal Association, and other organizations. He is active in the American Bar Association Section of Taxation. He served as Chair of the Committee on US Activities of Foreign Taxpayers and Treaties and was the USA reporter for the Foreign Lawyers Forum. Mr. Ruchelman served on the National Council of the International Fiscal Association — USA Branch. He received his J.D. Degree with honors from The George Washington University Law School (1972) and his undergraduate degree from Brooklyn College (1968).