Your
starting point should be form 8938 which covers all foreign assets including
everything which would be included on this June's FBARs. The 8938 has a part
that deals with interests in foreign financial institutions and there is a part
which deals with "everything else." That section lists the relevant
forms for foreign corporations, (5471) trusts,( 3520's ) and partnerships, (8865)
the idea being regardless of a taxable
event, all foreign assets over a stated threshold now have to be registered
with the IRS, and if you kindly file a form 3520, for example, the IRS will not
make you repeat the details on the 8938.
I
cannot imagine having to ask for the abatement of any late penalties on a 3520
if you are timely attaching new FATCA form 8938 to the 1040 which clearly
contemplates the attachment of a 3520. The Service should not have a problem
with it.
2012
is the first year of FATCA. The year 1040 filers have to register their
foreign assets with Uncle. Next year and the year after, almost every foreign
bank in the world (if they want to continue to handle U.S. source income, )
will be required to sign an agreement with the IRS to turn over the SSNs of all
their American depositors or close their accounts.
A
truthful completion of this year's 8938 requires all 1040 filers to
disclose with this year's1040, whether there were foreign assets owned BEFORE
2011.
Tax
preparers should be asking clients direct questions about foreign holdings.
Your files should document your conversation about the details of foreign
HOLDINGS because we are moving beyond the concept of a taxable event triggering
a reporting requirement, to a full foreign asset disclosure concept where
foreign assets are registered with the government.
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