MBAF wishes to remind all taxpayers with a Report of Foreign Bank and Financial Accounts (FBAR) filing requirement that they must report their foreign assets by the IRS deadline of June 30.
FBAR filings have risen dramatically in recent years as The Financial Crimes Enforcement Network (FinCEN) has increased their efforts to crackdown on taxpayers with offshore assets. The FBAR, also-known-as FinCEN Form 114, was created to help the IRS and the U.S. Department of the Treasury combat attempts at money laundering and tax evasion via the use of offshore accounts.
Who Needs to File FinCEN Form 114?
U.S. taxpayers with an interest in or signature authority over foreign financial accounts, with a total aggregate value that exceeds $10,000 at any time during 2015, must electronically file the FBAR form by June 30, 2016, no extensions are available.
If you have, or believe you have an FBAR filing requirement, this deadline should be taken very seriously. Failure to file on time can result in severe fines, and even criminal charges. According to the IRS, “those who fail to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,000 or 50 percent of the balance in the account at the time of the violation.”
The FBAR filing requirement is not part of filing your normal tax return. The FBAR Form 114 is filed separately and directly with FinCEN. The June 30th deadline applies to FBAR compliance for tax year 2015. For filers required to file an FBAR for 2016 and thereafter, the deadline will be April 15 of 2017 and of each subsequent year. Six month extensions may be available for future filings.
Understanding the tax code and how it applies to FBAR requirements can be complex. If you would like to benefit from our expertise in these areas, or if you have further questions on this Advisory, do not hesitate to contact our Tax and Accounting Specialists, or call us at 1-800-239-1474.