The FBAR filing due date will be different next year.
Hopefully you have already submitted your 2015 FBAR filing which is due by June 30th this year. If not, you still have a little time left to scramble to get those filings submitted timely. And now just when you may have gotten used to the idea that your FBAR filing is due June 30th, that is all going to change next year. Under the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, which was signed into law during 2015, the due date for the FBAR next year will be different.
FBAR filings due in 2017 (for the 2016 FBAR) will be due April 15th. There will now be an extension available in order to extend the due date for a maximum of 6 months until October 15th. The official guidance as to how the extension will actually be applied for has not yet been issued but it has been speculated that it will be extended with an extension for your income tax return.
Additionally, there will be a provision for an automatic two month extension for a taxpayer residing outside of the country similar to the rules for income tax returns, and there is supposed to be some penalty relief available for first-time filers who fail to timely request or file an extension.
Recap: Who Has to Report?
I’ve talked about it in a previous post, but here’s a quick reminder of who is required to file an FBAR.
If you are a United States person that has a financial interest in or signature authority over foreign financial accounts, you must file an FBAR if the aggregate maximum value of those foreign financial accounts exceeds $10,000 (U.S. dollars) at any point during a calendar year. Interestingly, this also includes accounts of your employer that you might have signing authority over.
Let’s break this down even further. A “U.S. person” includes all of the following…
- U.S. citizens
- U.S. Green Card holders or U.S. residents
- Foreign nationals or Individuals who spend a significant amount of time in the U.S.
Therefore, there are many times we see individuals who might live in another country, but spend time in the U.S., whether it be traveling for work or for vacations. Many of these individuals may unknowingly trip up a tax filing obligation based on the amount of time they spend in the U.S.
To meet the substantial presence test, you must be physically present in the U.S. on at least 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 preceding years.
The test is calculated by counting the following:
- All of the days you were present during the current year,
- 1/3 of the days you were present in the first year before the current year, and
- 1/6 of the days you were present in the second year before the current year
If you meet the test described above you have an FBAR filing requirement.
What Should You Do If You Were Supposed to File an FBAR But Didn’t?
There are options available if you find that you should have filed an FBAR but didn’t. The IRS has made a few different programs available in order to file your delinquent FBAR filings such as the Delinquent FBAR Submission Procedures, the Offshore Voluntary Disclosure Program (OVDP), or one of two Streamlined Filing Compliance Procedures.
Which program you should use will depend on your specific facts and circumstances. Since the penalties for the failure to file an FBAR can be extremely severe, it’s important to consult with a professional who is experienced in this area. An experienced professional can help you to determine which path is right for you in order to get into compliance. Our international tax team here at Freed Maxick has a depth of experience in this area and we encourage you to contact us to assist in determining the best way to proceed with submitting your filings.View full article
Report of Foreign Bank and Financial Accounts (FBAR) Deadline June 30th
Did you know the deadline to file foreign bank and financial accounts (FBARs) is coming up soon? June 30th is right around the corner!
Many companies and individuals agree that the IRS rules and regulations in regard to foreign bank accounts and international tax issues are confusing and intimidating. That’s why it is important to connect with a trusted international tax professional… someone who can navigate through the complexities of these regulations and make things easy and more understandable to those who need to file.
A Little Background
From the IRS website, “If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.”
Important Reporting and Filing Information- Deadline June 30th
From the IRS website, “The FBAR is an annual report and must be received by the Department of the Treasury in Detroit, MI, on or before June 30th of the year following the calendar year being reported. While FinCEN strongly encourages individuals to electronically file FBARs, the form can be mailed to one of the two addresses below, provided that the mailing is received by June 30, 2013.”
What Should You Do Next?
There is limited time left to comply with IRS regulations regarding foreign bank accounts. Please feel free to contact us to connect with a member of our International Tax team. We at Freed Maxick CPAs are poised to assist you in assessing your FBAR filing requirements, assimilating the necessary information and preparing your current and past due FBARs. We also have considerable experience in helping taxpayer’s that have not been historically compliant to navigate the IRS guidelines and minimize their potential penalties through the various IRS Voluntary Disclosure Programs that have been available.
International Tax Services
Expatriation Consulting Services
Failure to File FBAR | Penalties
FBAR Penalty Relief Under Certain Circumstances
Recent FBAR Developments
Foreign Account Tax Compliance Act (FATCA)
U.S. Tax Services for Canadians
By: Howard Epstein, CPA, Director, International Tax
Opening a new front in the U.S. crackdown on offshore tax evasion, federal investigators have won court approval for a summons on a Caribbean bank, to turn over account data for wealthy American clients. This is just the latest of several overseas banks served with similar demands from the IRS, in an effort to identify federal tax evaders who have assets and income hidden offshore. This comes in response to the IRS leniency program (or Voluntary Disclosure Program), in which Americans can disclose previously secret foreign accounts to the IRS to avoid tax liens and pay back taxes.
The fact that the IRS is using John Doe Summons and other data mining means to flesh out non filers of FBARs provides further proof that they are steadfast in their resolve to find people committing tax fraud. The unfortunate part is that honest people that simply don't know the law are being compromised at the same time. It is important that those innocent people come forward under the current programs available before the IRS taps them on the shoulder and such relief is not available.
FBAR Filing Assistance
At Freed Maxick, we are poised to assist you in assessing your FBAR filing requirements, integrate the necessary information, and prepare your current and past due FBARs. We also have considerable experience helping taxpayers that have not been historically compliant navigate the IRS guidelines, minimizing any potential penalties through the various IRS Voluntary Disclosure Programs that are available.
For a confidential discussion of your FBAR situation, call us at 716.847.2651, or complete and submit this form for more information.