IRS Adopts New Form for U.S. Persons with Foreign-Source Deferred Compensation, Retirement Benefits or Equity Based-Awards and Other Specified Non-U.S. Financial Assets
As a result of the implementation of anti-tax evasion provisions of the Foreign Account Tax Compliance Act, U.S. persons with certain types of foreign compensation arrangements or other foreign assets may be required to include a new tax form with their federal tax returns for tax years beginning after March 18, 2010. This Form 8938, Statement of Specified Foreign Financial Assets, is required to be filed by U.S. taxpayers holding minimum amounts of “foreign financial assets.” The term “foreign financial assets” is defined broadly to include many arrangements not commonly considered “assets,” including, among other things, deferred compensation or retirement arrangements, stock options, restricted stock units and profits interests, as well as stock and derivative securities. In addition, domestic “financial assets” may trigger the reporting requirement if payment is guaranteed by a non-U.S. entity.