Tax and White Collar Defense & Investigations n Page 8 The Final Regulations provide that the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause. Even more significant than the potential civil penalty exposure, a taxpayer’s failure to comply with the Form 8938 filing obligations may cause the statute of limitations to remain open. In particular, for any taxpayer who fails to file Form 8938, or fails to report a specified foreign financial asset that is required to be reported, the statute of limitations for the tax year may remain open for all or a part of the income tax return until three years after the date on which the Form 8938 is filed.— ©2016, BLANK ROME LLP 1.  he Final Regulations exclude (1) any commodity hedging transaction T described in IRC § 954(c)(5)(A), determined by treating the corporation or partnership as a controlled foreign corporation; or (2) active business gains or losses from the sale of commodities, but only if substantially all the corporation or partnership’s commodities are property described in IRC § 1221(a)(1), (2), or (8). Matthew D. Lee is the author of The Foreign Account Tax Compliance Act Answer Book 2015 (published by the Practising Law Institute), a definitive treatment of the due diligence, withholding, reporting, and compliance obligations imposed by FATCA on foreign financial institutions, non-financial foreign entities, and withholding agents.

For more information on this publication, please click here. For additional information, please contact: Matthew D. Lee 215.569.5352 | Lee-M@BlankRome.com www.taxcontroversywatch.com .