US Persons with Foreign Interests Must File by June 30th or Pay Heavy Fines
By: Morris Law Group - June 17, 2015
If you are unsure this applies to you, click here for additional information from the BE-10 Instruction Booklet.
There is a largely unknown non-tax filing requirement called the Benchmark Survey of U.S. Direct Investment Abroad or Form BE-10, which must be filed before June 30th 2015 with the Bureau of Economic Analysis (BEA). The BEA conducts numerous mandatory surveys to collect data and other information on direct investments abroad. These survey obligations are pursuant to the International Investment and Trade in Services Survey Act (the Act). The BE-10 survey is conducted every 5 years. In prior years the filing was only due in the event the BEA contacted the U.S. person. Now it is a filing obligation on everyone.
Details of Who Must File
A BE-10 report is required of any U.S. person that had direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise - or an equivalent interest in an unincorporated foreign business enterprise - at any time during the U.S. person's 2014 fiscal year (even if the enterprise was sold in 2014). This includes U.S. individuals, companies, trusts, and estates that are residents in the U.S. or subject to its jurisdiction. It also includes any vehicle that is "transparent" for tax purposes (including trusts, partnerships or LLC's). A reportable business enterprise includes organizations, associations, branches, or ventures which exist for profit-making purposes, or to otherwise secure economic advantage. It also includes the ownership of any real estate associated in a foreign business. Executors of U.S. estates, Trustees, beneficiaries and Settlors of both U.S. and foreign trusts may have a BE-10 reporting requirement if the estate or trust has or owns an interest in a non-U.S. business enterprise. Trusts are considered to be intermediaries for the purpose of this form, and the beneficiaries of the trusts may be required to complete this form. In certain circumstances the Settlor may have to fill out this form as well.
The failure to file can result in both civil and criminal penalties. The civil penalty can range from $2,500 up to $250,000, including possible injunctive relief to force compliance. One who is in willful violation can incur a penalty of $10,000 and up to one year in prison, or both. Any officer, director, employee, or agent of any corporation who knowingly participates in the willful violation of this requirement, upon conviction, may be punished as well.
Deadline & Extension of Filing
The official deadline was May 29th 2015, however, the deadline was extended to June 30th 2015 for first time filers. In the event one is unable to complete the filing within the allotted period of time, a reasonable extension may be granted, however the request for the extension must be received by the June 30th deadline and is in the complete discretion of the BEA. If filing for an extension, it is important to obtain a Reporter ID from the BEA via telephone at least 1-2 days prior to deadline of filing the extension.
Per the Act, the information obtained is confidential and can only be used by authorized individuals to obtain the information for statistical and analytical purposes. The Act states that the information received will not be published or available in a manner in which the identity of the filer would be compromised.
For more information on the BE-10 Benchmark Survey, click here. You can contact the BEA directly at (202) 606-5566.
** Disclaimer Required by IRS Circular 230** Unless otherwise expressly approved in advance by the undersigned, any discussion of federal tax matters herein is not intended and cannot be used 1) to avoid penalties under the Federal tax laws, or 2) to promote, market or recommend to another party any transaction or tax-related matter addressed.