The definition of “in and doing business in” the United States for FBAR purposes |
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NOTE: This headliner is current through the publication date. Since changes may have occurred, no guarantees are made concerning the technical accuracy after the publication date.
Headliner Volume 262
February 26, 2009
When a person is trying to determine whether they need to file a Report of Foreign Bank and Financial Accounts (commonly known as an FBAR) one of the first things they need to do is determine if they are a “United States person.” The definition for the term “United States person,” found in the instructions for the FBAR (Form TD F 90-22.1), states that the term “United States person” means a citizen or resident of the United States, or a person in and doing business in the United States.
The term “person” includes individuals and all forms of business entities, trusts and estates. Entities that are disregarded for tax purposes (such as limited liability companies that are owned by one individual and that do not elect to be treated as corporations for tax purposes) are not disregarded for FBAR reporting purposes.
Whether a person is considered, for FBAR purposes, to be in and doing business in the United States is based on an analysis of the facts and circumstances of each case. Generally, for these purposes, a person is not considered to be in and doing business in the United States unless that person is conducting business within the United States on a regular and continuous basis.
Accordingly, persons who are merely visiting the United States are not in and doing business in the United States for FBAR reporting purposes. Also, persons who sporadically conduct business in the United States are not in and doing business in the United States for FBAR reporting purposes. Examples of persons who are not considered to be in and doing business in the United States for FBAR reporting purposes and therefore do not have to file FBARs include:
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Persons who are not citizens or residents and who are engaged in a business but who only occasionally visit the United States to meet customers or business associates
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Artists, athletes, and entertainers who are not citizens or residents of the United States and who only occasionally come to the United States to participate in exhibits, sporting events, or performances
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A person who is not a United States citizen or resident and who visits the United States to manage his personal investments, such as rental property, and conducts no other business
The FBAR filing requirements have no effect on a person’s tax obligation. Generally, foreign persons who derive income from sources within the United States are still subject to tax on that income, whether or not they are required to file an FBAR. They are also still subject to any applicable income tax withholding requirements.
References/Related Topics
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Page Last Reviewed or Updated: February 27, 2009