It’s no secret that in recent years, the IRS, Department of Treasury and others have vigorously pursued U.S. nationals with overseas accounts and income sources. One of the more well-known filing requirements – the Report of Foreign Bank and Financial Accounts (FBAR) – needs to be submitted by June 30th, 2015. While most taxpayers are aware of this deadline, there are far fewer aware of the newest filing requirement mandated by the Department of Commerce Bureau of Economic Analysis (BEA). The BEA requires that U.S. taxpayers with foreign business enterprises provide specific business activity, product, employment, sales information. Previously the information was only submitted via survey when requested. However, the new rule requires that the survey be submitted without a direct request from the BEA. To help clients, prospects and others, JLK Rosenberger has provided a summary of the key program points below.
The U.S. Department of Commerce, through the Bureau of Economic Analysis (the “BEA”), requires reporting on Form BE-10 from any U.S. person (including entities or individuals) that had a “Foreign Affiliate” at any point during 2014. Form BE-10, Benchmark Survey of U.S. Direct Investment Abroad, is a benchmark survey designed to capture key information about foreign business, investment and income activities. At the time of the 2009 survey, a BE-10 Filing was required only from a U.S. person contacted by the BEA. The new rule published in the Federal Register on November 20, 2014, announced that any U.S. person that satisfies the applicable reporting threshold will be required to make a BE-10 Filing, regardless of whether the BEA has contacted such entity.
Who Has to File?
There are very specific rules governing who is required to file. Generally, U.S. person is required to make a BE-10 Filing if the U.S. person holds direct or indirect ownership or control of 10% or more of the “voting securities” of a non-U.S. entity. In addition, a report must also be filed if there was an equivalent interest in an unincorporated foreign business.
Penalties for Non-Compliance
While the BEA has stated informally that it does not intend to penalize an entity that fails to file, persistent failure to file may ultimately result in civil and criminal penalties. The BEA may pursue civil penalties up to $25,000 and seek injunctive relief, and willful violations may result in criminal penalties of up to $10,000 and imprisonment for up to one year.
The filing deadline is quickly approaching. If you are unsure whether you are required to submit this filing, then it’s important to speak with an advisor who can guide you through the process. The deadline is quickly approaching so it is important to take immediate action. JLK Rosenberger is here to help! For additional information, please contact us at 818-334-8623, or click here to contact us. We look forward to speaking with you soon.