New Reporting Requirements for 2011 and Beyond for Specified Foreign Financial Assets
On March 18, 2010, the Foreign Account Tax Compliance Act (“FATCA”) was enacted as part of the Hiring Incentives to Restore Employment (“HIRE”) Act. Section 511 of FATCA creates new Internal Revenue Code Section 6038D. Internal Revenue Code Section 6038D requires specified individuals who own interests in specified foreign financial assets with an aggregate value of more than $ 50,000 (or such higher value as Internal Revenue Service (“IRS”) prescribes) to report certain information relating to those assets to the IRS by attaching the requested information to their Federal Form 1040, for tax years beginning after March 18, 2010. Internal Revenue Code Section 6038D(h) directs the IRS to issue regulations or other guidance to implement Internal Revenue Code Section 6038D. On December 15, 2011, the IRS issued Draft Form 8938 and Draft Instructions to Form 8938. The Form became final later in the same month and is in accordance with the regulations. This article examines the reporting requirements of Form 8938.