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RS relaxes FBAR requirements for nonresident individuals, foreign entities and those without a financial interest.

On February 26th the IRS issued the much awaited guidance on FBAR filing. This guidance relates to the upcoming June 30th, 2010 deadline for reporting foreign bank accounts for the year 2009 as well as certain prior years’ filings.

Two separate sets of guidance were issued to deal with matters that were unclear until now. Announcement 2010-16 suspends the filing requirement for nonresident individuals and foreign entities. In other words, it confirms that only a "United States person" meaning a citizen or resident of the United States, a domestic partnership, a domestic corporation or a domestic estate and trust is required to file FBAR forms every year to report the prior year's foreign bank and financial information above the $10,000 threshold.

The second set of guidance, Notice 2010-23 provides information for persons with financial interest in commingled funds. It states that "U.S. persons" with interests in foreign hedge funds and private equity funds are not required to file FBAR forms. The FBAR filing requirement is still in effect for "U.S . persons" with a financial interest in a comingled fund that is a "mutual fund." The notice also extends the filing deadline for US persons with signature authority but no financial interest in a foreign financial account, to June 30th, 2011, for 2010 and earlier years.

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