Businesses and certain individuals with foreign investments need to file a new form with the government by June 30 or else face stiff penalties.

The new Form BE-10 provides information to the U.S. Commerce Department’s Bureau of Economic Analysis about foreign investments.

“Form BE-10 is a survey filing and is not an income tax return, nor will any type of payment be required,” wrote Sarah Stubbs, a principal at the CPA firm Johnson Lambert, in an email Monday. “For this reason, it may or may not be supported by your tax provider. This form provides information only to the bureau for statistical reporting purposes regarding U.S. ownership in foreign investments. The form(s) request a combination of financial, operational and ownership structure data.” 

The form is mainly intended for businesses with foreign investments. Originally individuals only had a filing requirement if they were directly contacted by the bureau, but last November, the government amended its regulations to require any U.S. person who had at least a 10 percent direct or indirect interest in a foreign business enterprise at any time during the U.S. person’s fiscal year to file the Form BE-10. A U.S. person includes individuals, trusts, estates, corporations and partnerships.

"With many of our clients fighting the IRS over FBAR penalties, we err on the side of filing whenever the government requests a U.S. person to file an international information report," said Carolyn Turnbull, international tax services director at Vestal & Wiler CPAs in Orlando, Fla.

Penalties for failure to file the form range from $2,500 to $25,000. Even worse, individuals who willfully fail to file the form can face fines of up to $10,000 or imprisonment for a maximum of one year, or both.

Johnson Lambert noted in a follow-up email Tuesday that the Bureau of Economic Analysis recently clarified that their instructions on the FAQ appear to be in conflict with the publication of the Federal Register. “Their position of who is required to file the BE-10 form is as follows: The purpose of the BE-10 survey is to identify and record investment by U.S. persons, corporations and organizations which own or control 10% or more of foreign business enterprises. If your organization does not qualify, there is no requirement to file. Additionally, if your organization has not been contacted by the BEA previously, there is no requirement for you to file a ‘Claim for not Filing.’ Therefore, unless you meet the ownership requirement of a foreign business or have been contacted by the BEA, you are not required to file the form.”

The forms may be filed by fax or paper and no extensions are available unless the entity needs to report more than 50 foreign investments. More information is available on the bureau's Web site, along with the applicable forms and instructions. A request form to file for an extension until August 31 is also available here.

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