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Aspen Office
400 East Main Street
Aspen, CO 81611

Carbondale Office
0326 Hwy 133, Suite 200
Carbondale, CO 81623


Earlier this month we sent out reminders of filing requirements for individuals who have bank or other financial accounts in a foreign county. Since that time, the IRS has continued to issue further clarification of the requirements as well as temporarily suspending deadlines for certain filers. These efforts by the IRS clearly signify the Treasury's focus on uncovering unreported income earned and assets held offshore.

Penalties for noncompliance are severe. Penalties for unintentional failure to file may be assessed at up to $10,000 per account. Penalties for willful avoidance may be assessed as high as $100,000 or 50% of the account value at the time of enforcement. In extreme instances, criminal penalties may also apply. There are, however, ways to reduce the amount of certain penalties that might be incurred. The IRS has an Offshore Voluntary Disclosure Initiative in place through August 31, 2011 for previously undisclosed accounts and undisclosed foreign entities that might have been used to avoid or evade tax. The Initiative is narrow in its application but, when it applies, provides significant benefits to the applicant. A 90-day extension of the deadline is available in certain circumstances. Call us immediately if you think you might be eligible for this Initiative.

As a refresher, an individual is required to file Form TD F 90.22.1, Report of Foreign Bank and Financial Account (the “FBAR”), disclosing the name and location of a foreign account that is valued greater than $10,000 at any time during the year. The FBAR is due no later than June 30 of the following year. Beginning in 2011, most taxpayers holding foreign accounts greater than $50,000 are also required to file a statement detailing the nature of the foreign account(s). This includes domestic corporations and partnerships holding “specified foreign financial assets.” This reporting has, however, been temporarily suspended pending additional IRS instructions for reporting.

As you can see, the reporting requirements for foreign financial accounts are complex and are often overlooked. Even ownership of foreign real estate or other assets may also need to be addressed. We invite you to contact our office if you have questions as to whether you or your business is in compliance with these ever-changing laws.

Reese Henry & Company, Inc.
400 East Main Street Aspen, CO 81611
970.925 3771

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