Groom Law Group plans to ask the IRS to clarify a recent announcement postponing until at least June 30, 2010, a requirement for pension plans to report for the first time investments in offshore hedge funds and private equity firms, said Jennifer Eller, an ERISA attorney for the firm.
The agency said the filing extension for the Treasury Department's Report of Foreign Bank and Financial Accounts form, or FBAR, applied to some offshore investments made by plans but not by plans holding securities owned through a foreign custody account, Ms. Eller said in an interview.
Ms. Eller said the extension the IRS provided was “very helpful.” But without further clarification, sponsors, custodians and trustees might have to look through every foreign financial account to determine which might still be subject to the original Sept. 23 FBAR filing deadline, Ms. Eller said. “It's almost as much work as what you would have to do to make a full filing,” Ms. Eller said.
The IRS had no comment, said Bruce Friedland, an IRA spokesman.
The FBAR reporting obligation has been in effect since the early 1970s. But until recently it had been believed to not apply to pension investments, only to investments by U.S.-based individuals and corporations with more than $10,000 in offshore accounts.
Through changes in the instructions to the FBAR form — and a series of frequently asked questions and statements from IRS officials starting late last year — Treasury beefed up the obligation in a way that appeared to require pension plans, plan investment committee members and plan trustees to file individual FBAR reports on the investments with offshore managers.
