Tax penalties for late filing can be pretty hefty. However, the potential penalties for not filing one recently created form can be as much as $250,000 and up to five years in jail. That’s why the TD 90-22.1 deadline shouldn’t be missed. At this point you may be asking yourself just what is a TD 90-22.1 form.
The TD 90-22.1 is a form used to report your holdings in foreign bank accounts. This includes checking, savings, brokerage and other types of foreign accounts. If you have more than $10,000 in a foreign bank account you are required to file this form. The penalties mentioned above are very severe, but can be waived with a letter of reasonable cause if you miss the June 30th deadline.
There are other penalties as well, including up to $500,000 and 10 years in prison for fraud or up to 5 years in prison for providing false information on the form. The IRS takes this little known form very seriously.
Unlike many forms that should be postmarked by the deadline, the IRS expects the TD 90-22.1 form to be received by the June 30th deadline. Fortunately, the information needed to complete the form is easier to come by than a typical 1040. Many foreign banks will have your maximum account value information readily available.
If you believe you meet the requirement to file this form, or you just aren’t sure, make sure you contact your tax accountant.