Friday, March 02, 2012
Foreign Bank and Financial Accounts (FBAR), form TD F 90-22.1, and IRS form 1065 Filing Requirements for LLC's
There is a lot of interest out there right now on these topics, particularly from beneficial owners of US entities that are located outside of the United States.
posted by Russell Rozanski at 10:45 AM 0 Comments
We've recently obtained some information to share with you from one of our affiliated tax professionals that we hope you will find useful when determining your specific requirements and responsibilities:
Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts is used to report a financial interest in or signature authority over a foreign financial account and is required to be submitted to the US Department of the Treasury by June 30 of each year.
Anyone who is a United States Citizen, United States resident, or entities created or organized in the United States or under the laws of the United States and has a financial interest in or signature authority over a foreign financial account is required to file this form if the combined totals in all foreign accounts is greater than $10,000 at any time during the calendar year.
You are considered to have a financial interest in a foreign account if you are the owner of record (the account is in your name) or holder of legal title.
For a Limited Liability Company this would apply if the foreign accounts were in the name of the Limited Liability Company or if the Limited Liability Company was part of another venture and had at least a 50% ownership in that venture.
The filing requirement does not extend to the members of the Limited Liability Company as long as they are non US residents.
Based on the information known, the Delaware Limited Liability Companies would be required to file a TD F 90-22.1 form if there were foreign accounts open in their names.
There is no requirement for the Limited Liability Company to obtain an Employer Identification Number if the sole purpose for such number is to file this form.
The penalty for not filing the return is a maximum fine of $10,000 for each return not filed.
Additionally, per IRS regulations all Limited Liability Companies with two or more members are required to file IRS Form 1065 each year even if all the earnings of the Limited Liability Company are generated outside of the US. There would be no filing requirement for the members as long as they are not US Citizens or Residents and therefore the IRS would not impose tax on the earnings.
These Limited Liability Companies would be required to obtain an Employer Identification Number in order to properly file the return.
Here's some additional information on EIN procurement as well as FAQs Regarding FBAR from the IRS.
If you'd like to work directly one-on-one with Delaware Intercorp, Inc. and our partners for your entity maintenance and compliance needs, we'd love to hear from you! Contact us via email at email@example.com or by phone 302.266.9367.