Reporting of Foreign Bank and Financial Accounts (FBAR) and Beyond If you have any foreign investments, you should be aware of the following:

Action required before June 30, 2011:
Each U.S. person who has a financial interest in or signature or other authority over foreign bank accounts, securities accounts or other financial accounts must file a Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts or FBAR) for each calendar year during any part of which the aggregate value of the accounts exceeds $10,000. This is true even if the account has not earned any income during the year. The FBAR is due by June 30 following the year for which it applies. A U.S. person means United States citizen; United States resident; entities, including but not limited to, corporations, partnerships, limited liability companies, and trusts or estates formed under the laws of the United States. The penalties for failure to file a FBAR are onerous. The civil penalties for a non-willful violation may not exceed $10,000 per violation. Civil penalties for a willful violation may not exceed the greater of $100,000 or 50% of the amount in the account at the time of the violation. The criminal penalty for willful violations is a fine of not more than $250,000, or imprisonment for not more than five years, or both.

Action required before August 31, 2011:
The Internal Revenue Service has launched a special voluntary disclosure initiative under which taxpayers who failed to file a prior year FBAR report on an account for which they had no tax liability can cure the FBAR delinquency without being subject to civil or criminal penalties. This is accomplished by the taxpayer filing a delinquent FBAR report with an explanatory statement by August 31, 2011. However, FBARs for 2010 are due on June 30, 2011 and must be filed by that date. Besides the FBAR filing, there are various filing requirements to be met when a U.S. person holds foreign investment or receives foreign gifts. To name a few,
• Form 926, Return by U.S. Transferor of Property to a Foreign Corporation
• Form 8858, Information Return of U.S. Persons with Respect to Foreign Disregarded Entities
• Form 8865, Return of U.S. Persons with Respect to Certain Foreign Partnerships
• Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of
Certain Foreign Gifts

Penalty for failure to file any of the above forms can be severe. In some cases, the individual officer of a U.S. entity which holds foreign investment is subject to filing requirement. If you want to file, or are uncertain whether you are required to file, any form(s) mentioned above for the current year or for a past year, please give us a call to discuss your situation and the best way to proceed.

IRS regulations require us to advise you that, unless otherwise specially noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) was not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties; furthermore, this communication was not intended or written to support the promotion or marketing of any of the transactions or matters it addresses.