נכתב ע"י ג'וש ייני-רואה חשבון. עדכון: יולי 2012
FAQ’s: Filing the FBAR (TD 90-22) for Israeli Accounts.
It applies to all financial accounts not just to bank accounts!
The “FBAR” must be filed by US persons annually if they have an involvement in a foreign financial account. While it is generally understood that US persons are obligated to file income tax returns each year, it is not as well understood that such persons may have additional US reporting requirements if they have an interest in any foreign financial account, not just a bank account.
The “FBAR,” (Form TD F 90-22.1: Report of Foreign Bank and Financial Accounts), must be filed by US persons on an annual basis if at any point during the calendar year they have an ownership interest in or signature authority over a financial account (or several such accounts) in a foreign country with an aggregate value in excess of $10,000. Once the $10,000 value is exceeded, each account has to be reported regardless of its value. Failure to file the report is punishable by both civil and criminal penalties.
Foreign Account Tax Compliance Act (FATCA) will require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers starting January 1, 2013. Learn more
Since IRS will use the information obtained from FBAR forms and FATCA reporting to match the income reported on the personal tax return for these accounts, you should discuss these issues with a tax adviser who is knowledgeable in such international tax matters and the US-Israel tax treaty.
1. Does a Kupat Gemel (קופת גמל) account have to be included on the FBAR filing? All Kupat Gemel accounts should be reported under Part II “Information on Financial Accounts Owned Separately”. On Line 16 where it asks for type of account, you should check the box that says “Other” and enter the word “pension” for the description.
2. Does a Keren Hishtalmut (קרן השתלמות) account have to be included on the FBAR filing? All Keren Hishtalmut accounts should be reported under Part II “Information on Financial Accounts Owned Separately”. On Line 16 where it asks for type of account, you should check the box that says “Other” and enter the word “pension” for the description.
3. Does my Israeli pension need to be reported on the FBAR filing? It depends on the type of pension account. Foreign retirement accounts and pensions retirement savings accounts which you own or control, such as accounts similar to individual retirement accounts, annuities, and 401k-type plans (which have separate accounts in your name) would need to be reported. The employee has financial interest in these kind of accounts. The current redeemable value of the pension must be reported on the FBAR under Part II “Information on Financial Accounts Owned Separately”). On Line 16 where it asks for type of account, you should check the box that says “Other” and enter the word “pension” for the description. On the other hand, if when you retire you will just be entitled to receive a percentage of your monthly salary from the pension company or your former employer it does not have to be reported on the FBAR form.
4. Does my insurance policy have to be reported on the FBAR form? If the insurance policy has a cash surrender option (meaning that you can redeem the policy for cash) the value that you can get for the policy as of December 31st should be reported on the FBAR under Part II “Information on Financial Accounts Owned Separately”). On Line 16 where it asks for type of account, you should check the box that says “Other” and enter the word “insurance” for the description.
5. If both my spouse and I have accounts in a Kupat Gemel, Keren Hishtalmut, insurance or pension funds, do we have to file an FBAR for each of us? Yes. Each one of you must file a separate FBAR to report your individually owned funds.
6. If both my spouse and I had to file separate FBAR forms to report our individual accounts, do we have to include our jointly owned accounts on both FBAR forms or is it enough to report it on one form?
The jointly owned accounts should be reported on both FBAR forms. On the other hand, the spouse of an individual who files an FBAR is not required to file a separate FBAR if the following conditions are met: (1) all the financial accounts that the non-filing spouse is required to report are jointly owned with the filing spouse; (2) the filing spouse reports the jointly owned accounts on a timely filed FBAR; and (3) both spouses sign the FBAR in Item 44.
7. What is the due date for filing the FBAR? The FBAR must be received by the Department of the Treasury by June 30th. There is no extension for filing this form.
8. What if my name is on an account from which I do not benefit or the funds are not for my use? One is considered to have financial interest in an account if his name is listed on the account. It should be reported in Part III as joint account.
9. In which currency is the account value declared? The account value should be declared in U.S. dollars.
10. Which exchange rate should be used to convert my account value to U.S. dollars? The year – end exchange rate should be used. The exchange rate from NIS to U.S. dollars for 2011 is 3.773
11. Does the value of real estate property owned in a foreign country need to be included in the FBAR? Only non US financial accounts are to be included in the FBAR. Real estate should not be included.
12. To what address should I mail the FBAR? The regular postal address is: U.S. Department of the Treasury PO Box 32621 Detroit, MI 48232-0621 USA. The fedEx address is: IRS Enterprise Computing Center ATTN: CTR Operations Mail Room, 4th Floor 985 Michigan Avenue, Detroit, MI 48226 The phone number to use is (313) 234-1062
Starting in 2011, you can now file FBAR forms electronically. The FBAR e-filing system can be found at http://bsaefiling.fincen.treas.gov Currently, the system can only accommodate one digital signature per FBAR, so married taxpayers who otherwise would have the option of joint filing must file separate FBAR’s on the online system. Alternatively, you can continue filing the FBAR on paper.
ADDITIONAL TIPS:
1. The account value to be used is the maximum value of the account during the calendar year based on the statements you receive. If you cannot ascertain the highest value then you can rely on statements that are accessible to you.
2. For accounts holding securities (stocks or bonds), the maximum value of the account should be taken from the last day of the year plus any withdrawals taken during the year.
3. When asked to list the number of joint owners on the account, do not include the filer in the count (i.e. if the account is held by the filer and his spouse the number of joint owners is one.)
4. If there is more than one joint owner, enter the information of the primary joint owner in Part III. The primary joint owner will be the first name listed on the account other than you.
5. If the joint owner is the spouse, write the spouse’s last name followed by the word “spouse” in parenthesis on line 26.
6. If you own foreign country based mutual funds (e.g Israeli mutual funds) you may have additional obligation to file reports for these mutual funds under the PFIC rules ( Passive-Foreign-Investment-Corporation)
7. If you have ownership in a foreign corporation or a partnership you may have additional filing obligations to the USA .
This post is intended to provide general information. It is not a comprehensive analysis of the IRS provisions and should not be relied upon as legal or tax advice.
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