(a) In general. Each United States person having a financial interest
in, or signature or other authority over, a bank, securities, or other
financial account in a foreign country shall report such relationship
to the Commissioner of Internal Revenue for each year in which such
relationship exists and shall provide such information as shall be
specified in a reporting form prescribed under 31 U.S.C. 5314 to be
filed by such persons. The form prescribed under section 5314 is the
Report of Foreign Bank and Financial Accounts (TD-F 90-22.1), or any
successor form. See paragraphs (g)(1) and (g)(2) of this section
for a special rule for persons with a financial interest in 25 or
more accounts, or signature or other authority over 25 or more accounts.
(b) United States person. For purposes of this section, the term “United States person” means—
(1) A citizen of the United States;
(2) A resident of the
United States. A resident of the United States is an individual who
is a resident alien under 26 U.S.C. 7701(b) and the regulations thereunder
but using the definition of “United States” provided in 31 CFR 1010.100(hhh)
rather than the definition of “United States” in 26 CFR 301.7701(b)-1(c)(2)(ii);
and
(3) An entity,
including but not limited to, a corporation, partnership, trust, or
limited liability company created, organized, or formed under the
laws of the United States, any State, the District of Columbia, the
Territories and Insular Possessions of the United States, or the Indian
Tribes.
(c) Types of reportable accounts. For purposes of this section—
(1) Bank account. The term “bank account” means a savings deposit,
demand deposit, checking, or any other account maintained with a person
engaged in the business of banking.
(2) Securities
account. The term “securities account” means an account with
a person engaged in the business of buying, selling, holding or trading
stock or other securities.
(3) Other financial
account. The term “other financial account” means—
(i) An
account with a person that is in the business of accepting deposits
as a financial agency;
(ii) An account that is an insurance or annuity policy with a cash
value;
(iii) An
account with a person that acts as a broker or dealer for futures
or options transactions in any commodity on or subject to the rules
of a commodity exchange or association; or
(iv) An account
with—
(A) Mutual fund
or similar pooled fund. A mutual fund or similar pooled fund
which issues shares available to the general public that have a regular
net asset value determination and regular redemptions; or
(B) Other investment fund. [Reserved]
(4) Exceptions for certain accounts.
(i) An account of a
department or agency of the United States, an Indian Tribe, or any
State or any political subdivision of a State, or a wholly-owned entity,
agency or instrumentality of any of the foregoing is not required
to be reported. In addition, reporting is not required with respect
to an account of an entity established under the laws of the United
States, of an Indian Tribe, of any State, or of any political subdivision
of any State, or under an intergovernmental compact between two or
more States or Indian Tribes, that exercises governmental authority
on behalf of the United States, an Indian Tribe, or any such State
or political subdivision. For this purpose, an entity generally exercises
governmental authority on behalf of the United States, an Indian Tribe,
a State, or a political subdivision only if its authorities include
one or more of the powers to tax, to exercise the power of eminent
domain, or to exercise police powers with respect to matters within
its jurisdiction.
(ii) An account of an international financial institution of which
the United States government is a member is not required to be reported.
(iii) An account in
an institution known as a “United States military banking facility”
(or “United States military finance facility”) operated by a United
States financial institution designated by the United States Government
to serve United States government installations abroad is not required
to be reported even though the United States military banking facility
is located in a foreign country.
(iv) Correspondent or nostro accounts
that are maintained by banks and used solely for bank-to-bank settlements
are not required to be reported.
(d) Foreign country. A
foreign country includes all geographical areas located outside of
the United States as defined in 31 CFR 1010.100(hhh).
(e) Financial interest. A financial interest in a bank, securities or other financial account
in a foreign country means an interest described in this paragraph
(e):
(1) Owner of record or holder of legal title. A United States person
has a financial interest in each bank, securities or other financial account
in a foreign country for which he is the owner of record or has legal
title whether the account is maintained for his own benefit or for
the benefit of others. If an account is maintained in the name of
more than one person, each United States person in whose name the
account is maintained has a financial interest in that account.
(2) Other financial interest. A United States
person has a financial interest in each bank, securities or other
financial account in a foreign country for which the owner of record
or holder of legal title is—
(i) A person acting as an agent, nominee,
attorney or in some other capacity on behalf of the United States
person with respect to the account;
(ii) A corporation in which the United
States person owns directly or indirectly more than 50 percent of
the voting power or the total value of the shares, a partnership in
which the United States person owns directly or indirectly more than
50 percent of the interest in profits or capital, or any other entity
(other than an entity in paragraphs (e)(2)(iii) through (iv) of this
section) in which the United States person owns directly or indirectly
more than 50 percent of the voting power, total value of the equity
interest or assets, or interest in profits;
(iii) A trust, if the United States
person is the trust grantor and has an ownership interest in the trust
for United States Federal tax purposes. See 26 U.S.C. 671-679 and
the regulations thereunder to determine if a grantor has an ownership
interest in the trust for the year; or
(iv) A trust in which the United States
person either has a present beneficial interest in more than 50 percent
of the assets or from which such person receives more than 50 percent
of the current income.
(3) Anti-avoidance
rule. A United States person that causes an entity, including
but not limited to a corporation, partnership, or trust, to be created
for a purpose of evading this section shall have a financial interest
in any bank, securities, or other financial account in a foreign country
for which the entity is the owner of record or holder of legal title.
(f) Signature
or other authority.
(1) In general. Signature or other authority means the authority of an individual
(alone or in conjunction with another) to control the disposition
of money, funds or other assets held in a financial account by direct
communication (whether in writing or otherwise) to the person with
whom the financial account is maintained.
(2) Exceptions.
(i) An officer or employee of a bank
that is examined by the Office of the Comptroller of the Currency,
the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of Thrift Supervision, or
the National Credit Union Administration need not report that he has
signature or other authority over a foreign financial account owned
or maintained by the bank if the officer or employee has no financial
interest in the account.
(ii) An officer or employee of a financial
institution that is registered with and examined by the Securities
and Exchange Commission or Commodity Futures Trading Commission need
not report that he has signature or other authority over a foreign
financial account owned or maintained by such financial institution
if the officer or employee has no financial interest in the account.
(iii) An officer or
employee of an Authorized Service Provider need not report that he
has signature or other authority over a foreign financial account
owned or maintained by an investment company that is registered with
the Securities and Exchange Commission if the officer or employee
has no financial interest in the account. “Authorized Service Provider”
means an entity that is registered with and examined by the Securities
and Exchange Commission and that provides services to an investment
company registered under the Investment Company Act of 1940.
(iv) An officer or employee
of an entity with a class of equity securities listed (or American
depository receipts listed) on any United States national securities
exchange need not report that he has signature or other authority
over a foreign financial account of such entity if the officer or
employee has no financial interest in the account. An officer or employee
of a United States subsidiary of a United States entity with a class
of equity securities listed on a United States national securities
exchange need not file a report concerning signature or other authority
over a foreign financial account of the subsidiary if he has no financial
interest in the account and the United States subsidiary is included
in a consolidated report of the parent filed under this section.
(v) An officer or employee
of an entity that has a class of equity securities registered (or
American depository receipts in respect of equity securities registered)
under section 12(g) of the Securities Exchange Act need not report
that he has signature or other authority over the foreign financial
accounts of such entity or if he has no financial interest in the
accounts.
(g) Special rules.
(1) Financial
interest in 25 or more foreign financial accounts. A United States
person having a financial interest in 25 or more foreign financial
accounts need only provide the number of financial accounts and certain
other basic information on the report, but will be required to provide
detailed information concerning each account when so requested by
the Secretary or his delegate.
(2) Signature
or other authority over 25 or more foreign financial accounts. A United States person having signature or other authority over
25 or more foreign financial accounts need only provide the number
of financial accounts and certain other basic information on the report,
but will be required to provide detailed information concerning each
account when so requested by the Secretary or his delegate.
(3) Consolidated reports. An entity that is a United States person
and which owns directly or indirectly more than a 50 percent interest
in one or more other entities required to report under this section
will be permitted to file a consolidated report on behalf of itself
and such other entities.
(4) Participants and beneficiaries in certain
retirement plans. Participants and beneficiaries in retirement
plans under sections 401(a), 403(a) or 403(b) of the Internal Revenue
Code as well as owners and beneficiaries of individual retirement
accounts under section 408 of the Internal Revenue Code or Roth IRAs
under section 408A of the Internal Revenue Code are not required to
file an FBAR with respect to a foreign financial account held by or
on behalf of the retirement plan or IRA.
(5) Certain trust
beneficiaries. A beneficiary of a trust described in paragraph
(e)(2)(iv) of this section is not required to report the trust’s foreign
financial accounts if the trust, trustee of the trust, or agent of
the trust is a United States person that files a report under this
section disclosing the trust’s foreign financial accounts.
