Dual resident taxpayers
The final section 6038D regulations have changed the reporting rules for dual resident taxpayers, effective for taxable years beginning after December 19, 2011. For this reason, the published 2014 instructions and the instructions for Form 8938 for prior years are modified as provided in this update.
The following Form 8938 reporting rules, as more fully set forth in the final section 6038D regulations, apply to a dual resident taxpayer (within the meaning of §301.7701(b)-7(a)(1)) who determines his or her income tax liability for all or a portion of the taxable year as if he or she were a nonresident alien as provided by §301.7701(b)-7:
- Specified individual filing as a nonresident alien at the end of his or her taxable year
- Specified individual filing as a resident alien at the end of his or her taxable year
Accounts excluded from the definition of a financial account under an applicable Model 1 or Model 2 IGA
For taxable years beginning on or before December 12, 2014, if the jurisdiction in which a financial account is maintained has an IGA in effect, or is treated as having a Model 1 IGA or Model 2 IGA in effect, on or before the last day of the taxpayer's taxable year, retirement and pension accounts, non-retirement savings accounts, and accounts satisfying conditions similar to those described in 1.1471-5(b)(2)(i) that are excluded from the definition of financial account in such IGA are not required to be reported on Form 8938.
NOTE: For taxable years beginning after December 12, 2014, the final section 6038D regulations provide that, in addition to retirement and pension accounts and non-retirement savings accounts described in §1.1471-5(b)(2)(i), any retirement and pension accounts, non-retirement savings accounts, and accounts satisfying conditions similar to those described in §1.1471-5(b)(2)(i) that are excluded from the definition of financial account in an applicable Model 1 IGA or Model 2 IGA must be reported by the taxpayer on Form 8938. Thus, such accounts are subject to uniform reporting rules and must be reported without regard to whether the account is maintained in a jurisdiction with an IGA.
Joint Form 5471 or Form 8865 filing
A specified person that is included as part of a joint Form 5471 filing or a joint Form 8865 filing and who notifies the Internal Revenue Service as required will be considered to have filed a Form 5471 or Form 8865. Accordingly, the taxpayer does not have to report any asset on Form 8938 if the asset is reported on such Form 5471 or Form 8865 that is timely filed with the IRS for the same tax year and the taxpayer reports on Form 8938 the filing of the form on which the asset is reported.
Correction of references to U.S. Treasury Department's Financial Management Service
The U.S. Treasury Department's Financial Management Service has been consolidated into the U.S. Treasury Department’s Bureau of the Fiscal Service. Thus, references in the 2014 instructions to the U.S. Treasury Department’s Financial Management Service or U.S. Treasury Financial Management Service should be changed to the U.S. Treasury Department’s Bureau of the Fiscal Service.
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