FBAR – Extensions, Extensions, Extensions!
June 20, 2011Administrative Actions
Just as I thought that Treasury was done issuing notices extending the FBAR filing deadline for persons with signature authority but no financial interest in foreign accounts, here comes yet another notice. On June 17, 2011 the Financial Crimes Enforcement Network, or colloquially known as FinCen issued Notice 2011-2. This is the 3rd signature authority notice that I counted in the last month and the fifth notice since 2009 that extends the filing deadline for some signature authority accounts. So to recap, the whole extension plethora started with Notice 2009-35, then came Notice 2010-23, followed by FinCen Notice 2011-1, followed by Notice 2011-54, and finally (at least for now) FinCen Notice 2011-2. I do not want to sound surly, complaining about this and that, given that Treasury is giving taxpayers additional time to get their filings together, but I cannot help but muse that the bombardment with extensions could, and probably does, create confusion among taxpayers, in an area of the law that is far from crystal clear to begin with. This new notice piggybacks of off FinCen Notice 2011-1 and adds another category of filer to the (1)-(2) categories listed in Notice 2011-1 that will be eligible for the June 30, 2012 extension. The new category of eligible filer includes officers and employees of investment advisors registered with the Securities and Exchange Commission when such individuals have signature or other authority over (but no financial interest in) a foreign financial accounts of persons that are not registered investment companies. Who could this exception apply? Well, it seems that the exception would apply in the narrow circumstance when a manager is registered but the accounts he/she has a signature authority over are in an unregistered fund such as a private equity or a hedge fund. Under pre Dodd-Frank rules this seemed to be an unusual set up. Considering, however, that the Dodd-Frank Act repealed the private adviser exception for registration under the Advisers Act and now managers of all sorts of private funds will have to register, and considering that the registration deadline is approaching, it seems that this FBAR extension could apply to a significantly larger number of investment managers. The Notice could be found here. Tags: