Wednesday, October 8, 2008

New Form for Reporting Foreign Bank and Financial Accounts

October 1, 2008 the U.S. Department of Treasury issued a new Form TD F 90-22.1 REPORT OF FOREIGN BANK AND FINANCIAL ACCOUNTS.

Any U.S. person who has a financial interest in or signature or other authority over, any foreign financial accounts, including bank, securities, or other types of financial accounts in a foreign country, if the aggregate value of the financial accounts exceeds $10,000 at any time during the calendar year, must report that relationship each calendar year by filing this report with the
Department of the Treasury on or before June 30 of the succeeding year.

According to the new instructions, "The term 'United States person' means a citizen or resident of the United States, or a person in and doing business in the United States." As defined in US Code, a United States person includes:

An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, an Indian Tribe...and all entities cognizable as legal personalities.

Consequently, tax-exempt or nonprofit corporations, associations, trusts and their officers, directors and trustees may be required to file this form if the organization holds a financial account in a foreign country.

The new Form TD F 90-22.1 must be used for all filings beginning January 1, 2009.

Friday, October 3, 2008

Congress Extends the IRA Charitable Rollover

The massive Emergency Economic Stabilization Act of 2008 (the "bailout bill") that was signed into law today by President Bush includes a provision to extend the IRA charitable rollover through 2009. These provisions were originally included in the Pension Protection Act of 2006 in response to Hurricane Katrina as a means to increase tax-free charitable giving. The provisions allow an individual to donate up to $100,000 from an individual retirement account (IRA) to charity tax-free.

A bit of silver lining in this storm cloud.

Wednesday, October 1, 2008

Advance Ruling Period Change in Process

On September 9, the IRS announced that they were simplifying the exempt organizations process. In the past, most organizations that wished to be recognized as being publicly supported, as opposed to being a private foundation, would receive an advance ruling period. They were given five years to prove that they were publicly supported. At the end of this time, a filing was required to show the public support.

The IRS has concluded that the information contained in the redesigned Form 990 is sufficient for this process, and that no separate filing at the end of the advance ruling period is necessary. Organizations that have already received an advance ruling may treat their letter as a final determination letter.

For organizations that have questions of whether they will be able to show their public support, this means that they need to pay close attention to the representations they are making on their Forms 990.