Catherine M. Censullo CPA
One Minute Tax Tip


With all the IRS scrutiny on finding unreported foreign assets, you want to make sure that you haven't omitted reporting anything that applies to you.  You certainly don't want any unexpected surprises which could wind up being very costly to you.

First of all, the IRS wants to know if you have an interest in or signature authority over a financial account located in a foreign country. 

This means that your account is physically located in a foreign country, regardless of whether the bank is a branch of a foreign bank or a United States bank located overseas.  It even includes an account at work over which you have signature authority.  And regardless of the amount in your account, you are required to disclose it on Schedule B of your income tax return. 

What kind of accounts are included?

  • Securities accounts
  • Brokerage accounts
  • Savings accounts
  • Demand checking accounts
  • Demand deposit accounts
  • Time deposit accounts
  • Commodity futures accounts
  • Options accounts
  • Cash value insurance policies such as whole life or annuities

If the amount in these accounts exceeded $10,000 at any time during the year, you will also be required to file the new FinCEN Form 114 - Report of Foreign Bank and Financial Accounts.  This form must now be filed electronically and replaces the old Form TD F 90-22.1.

In addition, the IRS also wants to know if you received a distribution from, were a grantor of, or a transferor to a foreign trust.  Please note that you could be affected by this if you are a beneficiary of a foreign estate.  You must also disclose this on Schedule B of Form 1040.

Beginning in 2012, a new Form 8938 was added to be filed with your income tax returns if you had $50,000 or more at the end of the tax year and $75,000 or more at any time during the year.  This is called the Statement of Specified Foreign Financial Assets.

If you want more details of the specific information that applies and determine whether you need to file these forms, please go to

Please be aware that the IRS has set up agreements with many foreign countries and foreign financial institutions to report to them U.S. citizens and permanent residents that have accounts in foreign countries.  I know we all hate to think that Big Brother is watching, but he is.

The foreign requirements can be quite complex, so please do not hesitate to contact me if you have any questions.



Catherine M. Censullo, CPA

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