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May 29 Deadline for Foreign Affiliates, Offshore Disclosure, PayPal and FBARs

Lee Zimet, CPA, J.D., LL.M. 05.19.2015 | eVisor

May 29th Filing Requirement for U.S. Persons with Foreign Affiliates

The U.S. Bureau of Economic Analysis (BEA) recently imposed new filing requirements on U.S. persons with foreign affiliates. The BEA is an agency of the U.S. Department of Commerce. In an effort to secure current economic data on foreign affiliates, the BEA has mandated Form BE-10 filings by certain U.S persons once every five years. These forms were previously only required if a U.S person was contacted directly by the BEA.

Under the new rules, any U.S person that owns, directly or indirectly, 10% or more of a foreign business enterprise (including a partnership or other unincorporated enterprise) is subject to the reporting requirements. A U.S. person is defined to include individuals, trusts, estates, partnerships, corporations, or other organizations (including private funds) that are resident in or subject to U.S. jurisdiction.

Generally, U.S persons are required to file Form BE-10 by May 29, 2015. U.S persons may apply for an extension of time to file until June 30, 2015. Failure to file a Form BE-10 can result in civil penalties of $2,500 to $25,000. In addition, willful failure to file can result in a penalty of $10,000, and, in the case of an individual, possible imprisonment for not more than one year, or both.

For more information about this new filing requirement, click here.

Questions? Contact your Berdon advisor or Lee Zimet at 212.331.7681 or

Streamlined OVDP Requires Non-willfulness Certification

Taxpayers seeking to qualify for the reduced penalties of the IRS's streamlined offshore voluntary disclosure program (OVDP) need to certify the facts provided when asserting that their conduct was not willful.

The regular OVDP does not require that taxpayers certify that their failure to disclose offshore accounts was not willful. The streamlined program requires a non-willfulness certification and does not provide audit protection.

To certify, you must provide a written statement, under penalty of perjury, for all overseas activities and assets. The statement must detail specific reasons for your failure to report income, pay tax, and submit required information.  This certification will be reviewed by IRS examiners and if they find it questionable, the taxpayer may be subject to criminal investigation. 

Questions? Contact your Berdon advisor or Saul Brenner at 212.331.7630 or

You May Need to Disclose Offshore PayPal Accounts on FBARs

The IRS may regard your offshore PayPal accounts as financial accounts that would have to be reported when disclosing your overseas assets on the Report of Foreign Bank and Financial Accounts (FBAR). This has become an issue with the IRS because the PayPal account holder owns the funds in the account - the account has a present value - and it is a simple matter to withdraw those funds.

Questions? Contact your Berdon advisor or Saul Brenner at 212.331.7630 or