Sec. 6038D reporting of specified foreign financial assets postponed for one year

BY ALISTAIR M. NEVIUS, J.D.

The IRS on Wednesday announced that it is postponing for at least one year the requirement that domestic entities report interests in specified foreign financial assets. In Notice 2013-10, the IRS says that when it issues final regulations, they will apply no earlier than to tax years beginning after Dec. 31, 2012.

Sec. 6038D requires individuals to report interests in “specified foreign financial assets” (SFFAs) when filing their federal income tax returns. The IRS is also authorized under Sec. 6038D to apply the reporting requirement to any domestic entity that is formed or availed of principally to avoid reporting (a specified domestic entity).

In December 2011, the IRS issued temporary and proposed regulations (T.D. 9567; REG-130302-10) on the Sec. 6038D reporting requirement. The proposed regulations set out conditions under which a domestic entity will be considered a specified domestic entity and, therefore, required to report SFFAs in which the entity holds an interest. They were proposed to apply to tax years beginning after Dec. 31, 2011.

Alistair M. Nevius ( anevius@aicpa.org ) is the JofA’s editor-in-chief, tax.

SPONSORED REPORT

Click-through nexus: Pushing the boundaries of sales tax compliance

Sales and use tax compliance has been complicated by nexus expansion. In this report, we provide an overview of this issue and include a handy state-by-state summary of click-through nexus or notification requirements.

QUIZ

News quiz: Making allowances for the kids and the economy

Recent news gives CPAs insight into Americans’ attitudes about children and money and gauges outlook on the economy. See how much you know about recent news and reports with this quiz.

CHECKLIST

Auditing risks in culture

Cultural flaws can seriously damage an organization. Here’s how internal auditors can reduce risks by embedding culture audits into existing audit programs.