The Association for Financial Professionals (AFP) today sent a comment letter to the Financial Crime Enforcement Network and the Internal Revenue Service to express concern about rules that became effective June 30: Treatment of Persons with Signature or Other Authority Over, but No Financial Interest in, a Foreign Bank or Financial Account for Financial Bank Account Reporting (FBAR).
Specifically, one provision of FBAR created reporting requirements for cash purchases of negotiable instruments of $10,000 or more in foreign bank accounts. Upon close review of the final rules, AFP now has considerable concern that these rules place a reporting burden on more than the intended audience.
While it is understandable that corporations might incur additional costs as a result of implementing the FBAR rules, individuals might also incur increased costs for their personal tax preparation. AFP believes that adding this layer of costs to individual financial professionals, simply as a result of their career choices, does not support the intent of the guidance
"Most people who manage foreign bank accounts for their employers are doing their jobs as financial professionals. Most do not have a personal interest in those assets, nor are they engaged in money laundering, tax evasion or terrorist financing using these accounts," said Salome Tinker, AFP's director of governance, accounting and compliance. "Current FBAR rules will impose a significant reporting burden on financial professionals, who are not the intended focus.”
AFP urges the U.S. Treasury to reconsider its current guidance and exempt, or provide filing relief from the FBAR reporting requirements to, those U.S. persons with signature or other authority over, but no financial interest in the foreign bank or financial accounts of their employers. AFP asks that relief be retroactive for all prior years.
Read the comment letter: www.afponline.org/FBAR or contact Salome Tinker at 301.907.2862 for more information.
AFP represents financial professionals from over 5,000 corporations, including the Fortune 1,000 and the largest of the middle market companies. Membership includes a significant number of corporate treasurers who are responsible for the protection and management of corporate cash, and controllers and CFOs who are responsible for their corporate accounting, financial reporting and regulatory compliance.