The deadline for filing Form TD F 90-22.1for 2004 is June 30, 2005. Under the law, as changed by the American Jobs Creation Act of 2004 (the "Jobs Act"), persons failing to file Form TD F 90-22.1 face new and increased penalties.
Who Must File Form TD F 90-22.1
The Treasury Department requires, with certain exceptions, U.S. persons (individuals, corporations, partnerships, trusts or estates) with a financial interest in, or signature or other authority over, any foreign financial accounts (including bank or securities accounts) during a calendar year to report that relationship each year by filing Form TD F 90-22.1. This filing is necessary only if the aggregate value of the financial accounts exceeds $10,000 at any time during the year. A person subject to this requirement must report on Form TD F 90-22.1 identifying information about itself (e.g., name, address, taxpayer identification number) and about its foreign accounts (e.g., account locations, account values, account numbers)
Old Penalty for Failure to File
Prior to the Jobs Act, a civil penalty could only be imposed on a U.S. person for willfully failing to file Form TD F 90.22.1. The civil penalty was equal to the greater of (1) the amount of the unreported transaction or the value of the unreported accounts, up to a maximum of $100,000, or (2) $25,000.
New Penalty for Failure to File
The Jobs Acts added an additional civil penalty that may be imposed on any U.S. person that violates this reporting requirement, without regard to willfulness. This new civil penalty is up to $10,000. The new civil penalty may be waived if (1) any income from the account was properly reported on the person’s federal income tax return and (2) there was reasonable cause for the failure to report. In addition, the Jobs Act increased the prior penalty for willful failure to file to the greater of (1) 50 percent of the amount of the unreported transaction or value of the unreported accounts, or (2) $100,000.
If you have any questions about this update or if you would like our assistance in this matter, please call your Stoel Rives lawyer or a key contributor.