Mandatory Reporting of Foreign Bank Accounts

For tax exempt organizations, one of the little known IRS reporting requirements centers around foreign bank and investment accounts held by U.S. individuals or entities. The U.S. Treasury requires Form TD F 90-22.1 be filed to report holdings in foreign accounts by June 30th of each year. The reporting is required in the event that an individual or entity has accounts containing $10,000 or more in the aggregate. Penalties for not filing are staggering and can easily exceed the value of the accounts.

I find that many tax exempt organizations do not realize that they are subject to this filing. As the world shrinks, many organizations conduct operations in foreign countries. It is not unusual for an organization or a church to maintain foreign investment or bank accounts due to missions activities. Most organizations are not familiar with these filing requirements. Many times the professionals working with the organizations may not even realize that there are accounts in other countries.

If this blog is setting off alarms in your head, and you think your church or organization may have a reporting obligation in this area, then it is time to find out more information. For those who have not complied with this filing, the IRS does have a voluntary compliance program to help bring people and organizations into compliance without penalties.

If this update applies to you or your organization, more information on the subject may be located through the IRS website at www.irs.gov.