The Financial Crimes Enforcement Network (FinCEN) has issued an alert announcing that a provision in the recently passed Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changes the annual due date for filing Reports of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts to April 15.
The change was enacted in order to bring the FBAR due date in alignment with the April 15 Federal income tax filing season.
Automatic Deadline and Other Details
The Act also mandates a maximum six-month extension of the filing deadline. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required.
Note: The federal income tax filing date for tax year 2016, will be April 18th 2017, due to conflicts with the Washington D.C. Emancipation Day holiday and the FBAR deadline will be the same accordingly.
Who Needs to File an FBAR?
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 2016, must electronically file the FBAR form by April 18, 2016, subject to the automatic extensions mentioned above.
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.
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.