New Foreign Bank Reporting Form for 2008 (TD F 90-22.1)

The IRS (actually US Department of Treasury) has come out with a new Form TD F 90-22.1, Report of Foreign Bank and Financial accounts, which is required for all forms submitted after December 31, 2008 (including late forms for years prior to 2008).

The new form and instructions can be downloaded from the IRS web site:  http://www.irs.gov/pub/irs-pdf/f90221.pdf

This new form resolves a lot of the confusing issues which were caused by limitations on the old form, but also significantly increases the information required to be reported. 

To highlight some of the changes:

1)  There are now four separate categories (and related separate pages in the form):
  -  Accounts owned by an individual separately (i.e not a joint account), or owned by a corporation in which the filer has a financial interest (generally by owning or having the voting rights for more than 50% of a corporation, partnership, or trust;  see page 6 of the instructions for more details)
  -  Accounts owned jointly
  -  Accounts for which an individual has signing authority, but no financial interest
  -  Accounts for which a corporation is submitting a consolidated filing (not used by individuals)

2)  You must provide the exact maximum balance on any statement during the year (e.g. quarterly, monthly, or other more frequent statement).  If you only receive annual statements, you should use the maximum balance at any point during the year.  

3)  You should generally use the exchange rate at the end of the year (e.g. use € 1 = $1.4097, the rate for December 31, 2008, to convert the maximum balance in 2008). 

4)  You now need to provide the full address for each financial institution, even if you have a financial interest in the account (not required on previous forms).

5)  It is now possible to file an amended report by ticking the "Amended" box at the top right section of the form.

6)  If a spouse does not have any accounts held separately (i.e. the only foreign accounts held by the spouse are joint accounts together with the filer), they no longer need to file a separate form.  You should indicate that the joint owner is your spouse by writing (spouse) after the last name.  If they are not filing a separate form, the spouse also needs to sign the report on Page 1, though it is not stated exactly where (I would recommend directly under the filer's signature).

7)  There is now a hotline to call to confirm that they have received your report (saves registered mail or courier fees).  To verify a report has been received you can call the Detroit Computing Center Hotline at +1-800-800-2877.

David Colvin is a CPA and CFP® based in Amsterdam, Netherlands since 1998.  His niche focus is serving high-net-wealth individuals with cross-border tax and financial issues.  He is also an advisor to Maxim Global Wealth Advisors, based in Amsterdam and Portland, Oregon.

Comments

[M Newall]

Do you have to include a mortgage account in a foreign country even if it is not interest bearing? It is just a loan. How many years of amended form TDF 90-22.1 can a person do and not look like they didn't understand the form?

[Taxpat BV]

You do not need to include loan accounts on Form TD F 90-22.1, unless there is an "investment" element of the loan (then this is usually considered a securities account, if invested in stocks and bonds).

The rules around voluntary filing of prior year forms are pretty complex. Vern Jacobs has written a fairly comprehesive article on this, see http://www.vernonjacobs.com/voluntary-compliance.html.

[M Newall]

Thank you for your comment and it was very prompt! If loans do not need to be included, I have no amended forms to file! I think the directions for the form should say something about not including loans.

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