IRS Offers Relief For Filing 2008 FBARs

We previously advised about significant uncertainties that exist with respect to the recently revised Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts and related instructions (the "FBAR") (most significantly, with regard to whether U.S. persons who hold interests in offshore hedge funds or offshore private equity funds are required to file FBARs with respect to such interests). For a more detailed discussion of this issue, please see our client memorandum dated June 17, 2009, entitled "Uncertainties Regarding Applicability of FBAR Filings due June 30, 2009."

Today, the IRS announced relief for certain taxpayers with regard to FBAR filings due June 30, 2009, by updating previously released "Frequently Asked Questions" on the IRS website. The relief, which provides that the FBAR may be filed by September 23, 2009, without penalty, is limited to taxpayers who timely report and pay tax on all of their 2008 taxable income, but only recently learned of their FBAR filing obligations and have insufficient time to gather the necessary information to file the FBAR by June 30, 2009. The updated Frequently Asked Questions also address certain other aspects of the filing requirements.

IRS Circular 230 Disclosure: Any U.S. tax advice herein (or in any attachments hereto) was not intended or written to be used, and cannot be used, by any taxpayer to avoid U.S. tax penalties. Any such tax advice that is used or referred to by others to promote, market or recommend any entity, plan or arrangement should be construed as written in connection with that promotion, marketing or recommendation, and the taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

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