U.S. citizens or residents, domestic corporations or domestic estates or trusts must file Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation, to report any exchanges or transfers of tangible or intangible property (as described in section 6038B(a)(1)(A) of the Internal Revenue Code) to a foreign corporation. The U.S. transferor must file the Form 926 and the additional information required under Regulations sections 1.6038B-1(c) and 1.6038-1(d) and Temporary Regulations sections 1. 6038B-1T(c) (1) through (5) and 1.6038B-1T(d) with their income tax return for the tax year that includes the date of the transfer. The person could be subject to a penalty for failure to file equaling 10% of the fair market value of the property at the time of the exchange/transfer if the taxpayer fails to comply with the filing requirement. The penalty will not apply if the failure to comply is due to reasonable cause and not willful neglect. The penalty is limited to $100,000 unless the failure to comply was due to intentional disregard. A 40% penalty may also be imposed on any underpayment resulting from an undisclosed foreign financial asset understatement unless the understatement is due to reasonable cause. Moreover, pursuant to section 6501(c)(8), the period of limitations for assessment of any tax with respect to any tax return, event, or period to which the information relates is extended to the date that is 3 years after the date on which the information required to be reported is provided. Persons filing Form 926 may also be required to file a FinCEN Report 114, Report of Foreign Bank and Financial Accounts (“FBAR”) (formerly TD F 90-22.1), if they have $10,000 or more in a financial account held in a foreign country during the year. The forms and instructions are available as follows: Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation FinCEN Report 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website. The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Report 114. Note: Financial institutions are reminded that they must begin using the new FinCEN reports, which are available only electronically through the BSA E-Filing System. For more information, see Notice on E-Filing Mandate PDF. Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.