AAFCPAs would like to remind all taxpayers with an annual FBAR filing requirement to be sure to report their foreign assets by the quickly approaching April 18 filing deadline. We would also like to share that automatic relief is available. The IRS and US Treasury recently announced that the Financial Crimes Enforcement Network (FinCEN) will now grant filers missing the April 18 deadline an automatic extension until Oct. 16, 2017 to file the FBAR. Specific extension requests are not required.
It remains to be seen whether this automatic relief will be granted on an annual basis, thus AAFCPAs encourages filers to take note of this change, especially those who have otherwise completed and filed their 2016 tax returns. Penalties for not filing the FBAR by the extended due date remain at historical levels, as noted below.
Recent FBAR Changes
Tax legislation passed during 2015 impacts FBAR reporting starting this year. The due date has been accelerated from June 30 to April 15 (April 18th in 2017 due to a District of Columbia holiday). However, a filer will be able to request a six month extension of time to file, bringing the extended due date to October 15. In the past, no extensions were available. In addition, the Treasury Department will have the ability to waive penalties for first time filers that do not file for the extension but file Form 114 by October 15.
What is the FBAR?
The “FBAR” is the Report of Foreign Bank and Financial Accounts Form 114 that must be filed with FinCEN, which is a bureau of the US Treasury Department. The form must be filed electronically and is only available online through the BSA (Bank Secrecy Act) E-Filing System website.
Who Needs to File?
All taxpayers with foreign assets need to review this requirement to determine if they need to file. Specifically, any direct, or in certain cases, indirect interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during the tax year requires reporting and filing of the FBAR. The FBAR Form 114 is not part of filing your tax return and must be separately filed directly with FinCEN.
Please do not ignore the (extended) October 15 Filing Requirement as the Civil and Criminal Penalties for failure to file could be extensive. The maximum penalty for a non-willful violation is $10,000 and for a willful violation is the greater of $100,000 or 50% of the balance of the account at the time of violation.
AAFCPAs Can Help
AAFCPAs has extensive knowledge of the FBAR filing requirements and can provide guidance in determining whether you need to file and what information is required. As always, we are also able to assist with the preparation and e-filing of the required forms.
If you have any questions please contact your AAFCPA partner, or Rich Weiner at 774.512.4078, firstname.lastname@example.org.