The IRS has just issued a reminder to taxpayers that the FBAR filing deadline of June 30th is fast approaching. Unlike other tax forms, extensions for filing the FBAR are not allowed, so June 30th remains a hard deadline.
What is the FBAR?
The Bank Secrecy Act (BSA) gives the Department of Treasury the authority to collect information from United States persons, including expats, who have financial interests in or signature authority over financial accounts maintained with financial institutions located outside of the United States.
The BSA requires that a FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR), be filed if the maximum values of the foreign financial accounts exceed $10,000 in the aggregate at any time during the calendar year.
How is the FBAR Filed?
The FBAR form (FinCEN Form 114) must be filed electronically using the BSA E-Filing System maintained by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).
In its reminder, the IRS remarked that, in 2015, FinCEN received a record high 1,163,229 FBARs, up more than 8 percent from the prior year. FBAR filings have grown on average by 17 percent per year during the last five years, according to FinCEN data.
While this year’s hard FBAR deadline is June 30th, it should be noted that for tax years 2016 (that is, next year’s filing season) and onward, the FBAR due date will be moved to April 15th, but with a maximum extension of 6 months.
If you are a citizen living abroad and have an FBAR requirement, it is important that you file accurately and on time – penalties for non-compliance can be severe. In the case that you do end up missing this year’s deadline or have missed prior-year deadlines, you do have options for coming into compliance. When it comes to filing the FBAR, your best bet is enlisting the help of an Expat Tax Professional.
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