n-13-10.pdf

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# Notice 2013-10: Information Reporting by Domestic Entities under Section 6038D with Respect to Specified Foreign Financial Assets

This notice provides guidance to domestic entities concerning the first
taxable year certain domestic entities will be required to report interests in
specified foreign financial assets under section 6038D of the Internal Revenue
Code (Code).

Section 6038D was enacted by section 511 of the Hiring Incentives to
Restore Employment Act, Pub. L. No. 111-147, 124 Stat. 71 (the HIRE Act), and
applies to taxable years beginning after March 18, 2010. Section 6038D(a)
requires an individual who holds any interest in a specified foreign financial asset
during any taxable year to attach a statement to that individual's return of tax
imposed by subtitle A of the Code for the taxable year to report the information
identified in section 6038D(c) if the aggregate value of all such assets in which
the individual holds an interest exceeds $50,000 (or such higher amount as the
Secretary may specify) for such taxable year.

Section 6038D(f) authorizes the Secretary to issue regulations or other
guidance applying the provisions of section 6038D to any domestic entity as if
the domestic entity were an individual, if the domestic entity is formed or availed
of for purposes of holding, directly or indirectly, specified foreign financial assets.

On December 19, 2011, the Internal Revenue Service (IRS) and the
Department of the Treasury (Treasury Department) published temporary
regulations providing guidance to individuals required to report specified foreign
financial assets with their annual return pursuant to section 6038D. TD 9567, 76
FR 78553, 2012-1 C.B. 395. On December 19, 2011, the IRS and the Treasury

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Department also published a notice of proposed rulemaking that cross-
referenced those temporary regulations and also included Prop. Reg. §1.6038D-
6. REG-130302-10, 76 FR 78594, 2012-1 C.B. 412.

Prop. Reg. §1.6038D-6 sets out the conditions under which a domestic
entity will be considered a specified domestic entity and, therefore, required to
report specified foreign financial assets in which the entity holds an interest.
Prop. Reg. §1.6038D-6 is proposed to apply to taxable years beginning after
December 31, 2011.

The IRS and the Treasury Department intend that, when final regulations
are issued under section 6038D, those final regulations will modify the
effective/applicability date of Prop. Reg. §1.6038D-6. Reporting by domestic
entities of interests in specified foreign financial assets will not be required before
the date specified by final regulations, which will not be earlier than taxable years
beginning after December 31, 2012.

The principal author of this notice is Joseph S. Henderson of the Office of
Associate Chief Counsel (International). For further information about this notice,
contact Mr. Henderson at (202) 622-3840 (not a toll-free call).