In addition to the filing of FinCen Form 114, formerly FBAR, (Report of Foreign Bank and Financial Accounts) for bank accounts in excess of $10,000, certain specified persons that have specified foreign financial assets in excess of $50,000 at the end of the tax year ($100,000 for married filing joint persons) or more than $75,000 at any time during the tax year ($150,000 for married filing joint persons) are also required to file Form 8938 with their personal income tax return, beginning in 2011.  Filing of Form 8938 is not required for persons that are not required to file an income tax return, even if their specified foreign financial assets exceed the thresholds.

The IRS defines a specified person as:

• A U.S. citizen.
• A resident alien of the United States for any part of the tax year (treated as a resident alien for U.S. tax purposes under the green card test or substantial presence test).
• A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return.
• A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico.

The IRS defines specified foreign financial assets as:

• Any financial account maintained by a foreign financial institution.
• To the extent held for investment and not held in an account maintained by a financial institution, (a) any stock or securities issued by someone that is not a U.S. person, (b) any interest in a foreign entity, and (c) any financial instrument or contract with an issuer or counterparty that is not a U.S. person.

Failure to file and accuracy related penalties can be significant.  Please contact GTL at (818) 509-0066 should you have any questions or need assistance with preparing the FinCen (formerly FBAR) and/or Form 8938.