PwC alternatives alert, August 13, 2009

Important FBAR announcement: IRS Notice 2009-62 contains FBAR extension for certain persons

On August 7, 2009, the IRS announced that it was extending certain foreign bank account reporting ("FBAR") until June 30, 2010. In Notice 2009-62, (i) persons with only signature or other authority over foreign financial accounts, and (ii) persons with a financial interest in, or signature or other authority over, a foreign commingled fund, will have additional time to file Form TD F 90-22.1 for filing year 2008 and prior. This Notice is viewed as a supplemental extension of the filing deadline for FBAR forms with respect to the 2008 and earlier calendar years, and eliminates the previous deadline of September 23, 2009, for the two categories of filers identified above.

This Notice is critical for investment funds and managers that may be seeking to take advantage of the voluntary disclosure program since many undisclosed foreign financial accounts relate to accounts that may be considered "commingled funds" and/or solely attributable to signature or other authority. Note, however, that the voluntary disclosure program for prior year reporting for U.S.-owned traditional foreign financial accounts such as bank accounts and prime brokerage accounts has not been extended. September 23, 2009, is still the critical deadline to disclose accounts that may not have been reported in prior years (2003 through 2008). In addition, investment managers also have until September 23, 2009, to take advantage of the amnesty program available for prior year foreign informational reporting such as Forms 5471, 8865 and 926.

The Treasury Department is soliciting comments for a number of investment fund-related issues, including whether FBAR reporting should be required for commingled funds where it may be duplicative, and whether the FBAR reporting should be relieved for individuals that only have signature or other authority over a foreign financial account. Future guidance issued through treasury regulations is expected.

This administrative relief is available with respect to FBAR forms due for the 2008 and earlier calendar years. Feedback and comments on these open issues can be provided to the IRS until October 6, 2009.

Please consult your PwC tax advisor if you have further questions on this Notice.

Attached below are Notice 2009-62 from the IRS and an alert from PwC's IRS Service Team on this topic.

Click here to view the alert from PwC's IRS Service Team

Click here to view the Notice 2009-62 from the IRS