After Busy Season Updates
June 4, 2014

     We are sending you this newsletter to communicate changes to the Foreign Bank Account Reporting ("FBAR") filing requirements.  In addition, we will highlight the Colorado Payback Program, including the how and when to file.
FBAR Filing Requirements

 

    Any individual that is a citizen or entity incorporated in the United States that holds a financial interest in, or signature authority over, bank accounts, securities, or other financial accounts in a foreign country, with an aggregate value over $10,000 at any time during the calendar year, is required to file FBAR forms.  This requirement also includes individuals that have direct or indirect control over a foreign or domestic entity with foreign financial accounts.  For example, a corporate-owned foreign account would require filings by the corporation and by the individual corporate officers with signature authority.

   
    The FBAR forms are due on June 30th of each tax year. In 2014, the IRS has replaced Form TDF 90-22.1 with FinCEN Form 114 for Foreign Bank Account Reporting. In addition, it is now mandatory to electronically file Form 114 for all original and amended filings.

 

    If you would like our firm to submit your electronic FBAR forms on your behalf for the 2013 tax year, which are due on or before June 30, 2014, we must receive a signed consent (FinCEN Form 114a) from you prior to submitting the FBAR form and the all related information to complete the required forms.  If you do not provide our firm with information regarding any interest that you may have in a foreign account, or if we do not receive your signed authorization to file your foreign reporting form, we will not be able to prepare and file any of the required disclosure statements. 

  You are responsible for informing us if you have foreign filing requirements and timely providing us with the information necessary to prepare the appropriate form(s).  Failure to timely file the appropriate forms may result in substantial penalties. If you are unsure if you or your entity has foreign filing requirements please do not hesitate to contact us for advice on your situation.

State of Colorado SealColorado Payback Program

 

   Have you received deposits from customers that were returned by the bank or had an employee never cash a paycheck? If so, you are required by Colorado law to report this unclaimed property to the Colorado Payback program resulting in the property being categorized as abandoned property.

    Abandoned (unclaimed) property is defined as intangible personal property (and in some instances tangible personal property) that has gone unclaimed for at least 5 years by its rightful owner.  The definition of intangible personal property is personal property that has no intrinsic value but is merely the representation or evidence of valuable property rights. Intangible property can include: stock certificates, checks, drafts, deposits, customer credit balances, gift cards, security deposits, unpaid wages, and royalty payments.

 

    Colorado requires that you have reached out to the owner in written form 60-120 days before you file the report for unclaimed property to the Colorado Payback program.  Once you have decided an item is abandoned, you must report and remit it to:

      1) the state of the last-known address of the owner based on your books or records;

      2) the state your business is incorporated in if the property owner is unknown or you have no record of an address for the property owner; OR

     3) the state your business is incorporated in if the owner's address is in a foreign country

    You can download the unclaimed property report on the Colorado Payback website, see link below: (www.colorado.gov/treasury/gcp/).

 

     If you do not report the unclaimed property in a timely manner you can be assessed penalties and/or interest for failure to report/remit the property and failure to comply with the statute. Generally, interest is applied at 10%-25% of the property value. The civil/criminal penalties for failure to report/remit/deliver or filing a fraudulent report may include $100-$200 penalty per day ($10,000 maximum) and a fine between $1,000 and $25,000. In addition, states generally assess an additional 25% penalty on the value of the property.  For more information regarding this program, you can visit the Colorado website at:  www.colorado.gov/treasury/gcp/.  If would like help in making sure that you have accurately filed all required information, please do not hesitate to contact us for advice regarding your situation. 

    While these two topics are not necessarily income tax related they are essential to remember to do every year as the the penalties and fines for not submitting the required filings are substantial. Please feel free to contact us with any questions you may have.   
 Firm Signature
Soukup, Bush & Associates, P.C.
(970) 223-2727
www.soukupbush.com