Taxpayers have been struggling to comply with their reporting obligations for foreign financial accounts because of informal statements by IRS officials in June suggesting that the obligations were broader than previously thought. The IRS previously extended the June 30, 2009 filing deadline for the Report of Foreign Bank and Financial Accounts (the “FBAR”) to September 23, 2009.
Today, the IRS released a draft Notice providing a further extension to June 30, 2010 for FBARs relating to 2008 and prior years for (i) persons who have signature authority but no financial interest in a foreign financial account and (ii) persons who have a financial interest or signature authority over commingled funds. To the extent investments in foreign hedge funds (or private equity funds) constitute foreign financial accounts, the latter exception would apply. The Notice is available on the IRS website: http://www.irs.gov/pub/irs-drop/n-09-62.pdf.
The IRS Notice also invites comments on a range of related issues by October 6, 2009. Davis Polk intends to submit comments and would welcome any suggestions.