In our May 17, 2011 Tax Update, “Significant Changes to FBAR Filing for Employees of Public Companies Applicable to 2010 Filings,” we discussed the revised rules for the filing of TD Form 90-22.1, on which a U.S. person has to report an interest in a foreign financial account. In response to comments that have been received by the government, filings in certain circumstances have been deferred, with a due date of June 30, 2012 for reporting with respect to the year 2010.1 The extension is aimed at U.S. citizens or residents who have signing authority over, but no financial interest in, foreign financial accounts maintained by their employer. The extension principally applies to public companies and companies that are subject to government oversight.
With respect to individuals employed by certain listed companies or their subsidiaries, the following deferrals apply:
- an employee of a company that has stock (or ADRs) listed on any U.S. national securities exchange does not have to file an FBAR with respect to foreign financial accounts of the listed company. If, however, she has signing authority over foreign financial accounts owned by a subsidiary, she has FBAR reporting obligations with regard to those accounts. If the subsidiary is more than 50 percent owned (directly or indirectly) by the listed company, then the due date for those FBARs is now June 30, 2012.
- an employee of a more than 50 percent owned U.S. subsidiary of a U.S. company that has stock listed on any U.S. national securities exchange does not have to file an FBAR with respect to foreign financial accounts of her employer if the U.S. parent company and the U.S. subsidiary file a consolidated FBAR. However, she does have an obligation to file an FBAR for foreign financial accounts held by the U.S. parent company or any other subsidiary of the U.S. company if she has signing authority over the accounts. The FBARs for the accounts held by the U.S. parent company and the other subsidiaries that are more than 50 percent owned by the U.S. parent company are deferred until June 30, 2012.
Similar deferrals may exist for employees of banks, SEC regulated companies, registered investment advisors, and their subsidiaries. The charts found in our April 22, 2011 Tax Alert, “Preparing to File Report of Foreign Financial Accounts by June 30, 2011” provide a more complete overview of the FBAR rules.
This is welcome news for public company employees, and we applaud the results of the notice. There is some hope that the deferral will be made permanent. We note that the government did not accept requests to similarly defer filings by employees of private companies of a certain size because they felt that government oversight is a necessary feature for deferral. Thus, employees of many large privately held companies are still subject to reporting by June 30, 2011 for 2010.
1 FinCEN Notice 2011-1 FBAR Filing requirements – Extended Filing Date Related to Exceptions Described in 31 CFR 1010.350(f)(2). May 31, 2010.
Joan C. Arnold
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