IRSAC Issues 2010 Recommendations; Will Sanity In FBARs Advance?

The Internal Revenue Service Advisory Council (IRSAC) issued their 2010 report. The report includes 23 recommendations to the IRS (and Congress, I suppose). The entire report is worth perusing. I’m going to focus on just one item of the 23 in this entry: FBARs.

IRSAC notes that the requirements for the FBAR are confusing and extremely overbroad. Well, as one who practices in this area all I can say is, that’s absolutely correct. So what is the IRS (not IRSAC) proposing? Currently, plans are underway for an additional form, the Son of FBAR.

IRSAC’s recommendations are a breath of fresh air.

Our summarized recommendations include: (a) extending the due date to October 15 to coincide with the final filing deadline for most income tax returns; (b) providing coordinated electronic filing for income tax filers, developing an easy to use electronic filing portal for non-income tax filers, and adopting the well established “mailbox” rule for paper filers, (c) requesting guidance in connection with a reasonable cause penalty relief to encourage and accommodate filings when accounts have been disclosed and income has been substantially reported; (d) changing the filing threshold, and (e) providing an exemption from the filing requirement for employee benefit plans and U.S. officers and employees of publicly traded corporations and their subsidiaries.

Somehow I suspect that adding a second form that duplicates the FBAR wouldn’t be on their wish list.

Of course, just because the recommendations exist does not mean that anything will come of them. Unfortunately it’s far more likely we’ll see the Grandson of FBAR rather than sanity prevailing on this issue.


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