New FBAR Deadline: Why This Is Great News?

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This is what happened on the last day of July this year (2015): President Obama signed into law H.R. 3236, the Surface Transportation and Veterans Health Care Choice Improvement Act (The Act). An unlikely vehicle for deadline changes, but it did make some really important changes to Tax Law & Revenue Provisions, including:

1. FinCEN Form 114 (FBAR) filing and extension deadlines;
2. Tax Filing Deadlines;
3. Changes to consistent basis reporting between the estate and the person acquiring the property from the decedent.

Point #3 above modifies due dates for Trust returns: Foreign trusts with US Owners and transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, which is Form 3520-A and Form 3520.

New FBAR Extension and Due Dates:

The Act changes the deadline for the FBAR from June 30th to the April 15th, which is the due date for an individual who is resident in the United States. In addition to this, the FBAR can be extended for a period of six months ending October 15th, just as an Individual tax return.

For those who are not resident in the United States and have to file a US tax return, there is an automatic 2 month extension until June 15th {Under § 1.6081-5}. Under the Act now this extension is available to their FBAR filing as well.

For those who are filing an FBAR for the first time, the Act specifically states that, “[f]or any taxpayer required to file [an FBAR] for the first time, any penalty for failure to timely request for, or file, an extension, may be waived by the Secretary.”

These due dates are applicable to those returns filed after December 31st, 2015.

Form 3520 And Form 3520-A Deadlines:

The due date for Form 3520-A is now generally March 15th and the maximum 6 month extension will be September 15th. Form 3520 is due with the tax returns on April 15th and the maximum extension allowed will be 6 months ending October 15th.

For those of us who work with a lot of clients who have foreign bank accounts and are constantly juggling the FBAR due date of June 30th, with no extensions allowed, this finally comes as a a bit of good news in the constant gloom and doom that is to do with FBAR regulations.

The IRS or FinCEN need to provide further clarification on the format or forms for such extensions, which may be similar to Form 4868, which is the form for requesting extensions on Individual tax returns currently. There may also be a requirement that these extensions be filed on the BSA Website as in the case of the FBAR forms.

Bibliography: H.R. 3236 Tax Due Dates; § 1.6081-5; Form 4868;

Original Post By:  Manasa Nadig

I am Manasa Nadig, enrolled to practice and represent taxpayers with the Internal Revenue Service. I have been in the business of Tax Preparation & Tax Planning since 1999. My firm, MN Tax Solutions, LLC is based in Michigan, USA. Please connect with me on TaxConnections for more information about myself & the services provided by my firm.

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One comment

  1. The new FBAR rules do not take effect until the 2016 taxation. If you read the legislation which is tied to the calendar year C corporations, it is for taxation years beginning after December 2015 which means the FBAR filing date are for the 2016 taxation year which are now due April 15,2017 or in case of those outside of the US, June 15th or October 15th with the 4868 extension. That is my interpretation unless you have some additional information that FinCEN is changing the deadline for next year.

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