New IRS Rule Requires Reporting of Foreign Bank Accounts (This affects overseas ball players!)

A new IRS rule that should be of interest to US professional athletes playing abroad came into effect today.  The new rule says that a US Citizen who has a foreign bank account that exceeds the equivalent of $10,000.00 (US) at any time during the 2010 calendar year must report that account to the IRS.  It doesn't matter if your average account balance was below $10,000.00.  If the account was ever above $10,000.00 then the rule applies to you.  The requirement also applies if you have multiple accounts and the combined total of the accounts is ever greater than $10,000.00 (in other words, you can't avoid the reporting requirement by maintaining multiple foreign accounts).  This requirement applies to all accounts - even those accounts that do not contain US dollars (you would simply convert the amount to dollars when making the calculation to determine if you have to report). 

The report is due by June 30th of every calendar year (it's an annual reporting requirement - so you'll do it every year that you have an account over $10,000.00).  If you think you may be affected by this requirement, it's important that you discuss it with your tax advisor.  You can get more information and links to the reporting form here.

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