IRS Clarifies September 9 Extension for Offshore Reporting

The IRS on August 29 clarified its postponement of deadlines under the 2011 Offshore Voluntary Disclosure Initiative (OVDI). On August 28, in response to Hurricane Irene, the IRS moved the OVDI deadline to September 9 (from August 31), but did not address the August 31 due date for information filings that are not directly within the 2011 OVDI program, but are permitted to be filed under the OVDI’s FAQs 17 and 18.

The IRS has updated its 2011 OVDI frequently asked questions web page to clarify that “the September 9, 2011 extension also applies to taxpayers filing FBARs pursuant to FAQs 17 and 18.” The September 9 deadline has been inserted into both FAQs.

FAQs 17 and 18 provide that U.S. persons who reported all their taxable income but only recently learned of their filing failures with respect to Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), or other U.S. foreign information returns (for example, Forms 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, and 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts) can obtain penalty relief by filing these delinquent returns under the parameters of the FAQs, but outside the OVDI.