If you resided in the U.S. since the beginning of 2019, even for a short time, you may be required to file a form with the BEA (Bureau of Economic Analysis). The form is due on May 29, 2020 for some filers and on June 30, 2020 for others. Every five years the BEA requires that a form be filed. 2019 turns out to be one of those years. If you do not file this form on time, there could be civil and criminal penalties including fines of thousands of dollars. Be sure to consult your U.S. tax professional immediately to determine if you are required to file.
There are at least four different forms, one of which may be required. To determine which of them is the correct one that you are required to file, consult with your U.S. tax professional. I realize that this article will repeatedly tell you that you “may be” required to file or that it is best to consult a U.S. tax professional. This is due to the complexity of the instructions.
You are required to file one of the Forms BE-10 (or perhaps other BEA forms) if you either own a non-U.S. business enterprise or non-U.S. real estate. There are many rules and criteria for determining whether you are required to file, and which form you are required to file. You may even be required to file if your non-U.S. business enterprise is inactive.
If you were a U.S. resident for part of 2019 and you own non-U.S. real estate, check with your U.S. tax professional whether you need to file. If the real estate is rented out even if only for part of the year and use it for your own personal use the rest of the year, or if the real estate is commercial, you will have to file. If your company owns the real estate and you live in it, you may be required to file. If you own at least 10 percent of a non-U.S. business enterprise, you may be required to file.
Some estates and trusts may be required to file. Some non-U.S. persons or entities may be required to file if they own a U.S. entity that owns a non-U.S. business enterprise or real estate. Therefore, you must review all of your structures and their intricacies with your U.S. tax professional to ensure that you know whether to file and which form to file.
You are required to file these forms if you meet the criteria for needing to file, even if the BEA has not contacted you to ask you to file. If the BEA does contact you to file, you are required to file a form even if you do not meet the criteria, to notify them that you do not meet the criteria. The instructions advise you to retain copies of your reporting once filed, and to do so for at least three (3) years.
Note that the Act that empowers the BEA to require you to report states specifically that the data collected may only be used for statistical and analytical purposes, and that the BEA is prohibited from granting another agency access to the data for tax, investigative, or regulatory purposes. In addition, the data is not accessible via a Freedom of Information Act (FOIA) request. Though the President may authorize exchange of information amongst agencies, it will still only be for statistical and analytical purposes. Neither the BEA nor any of its contractors may provide enough information to be able to identify a reporter (individual, trust, estate or other).
For more information, see the BEA website. However, I cannot emphasize enough how important it is to consult the right professional in this regard.
Disclaimer: None of this article is to be construed as legal or tax advice. If you have encountered any issues discussed here, obtain immediate comprehensive tax advice. To contact us, click here.