Some U.S persons that have a financial interest in, or signature authority over, financial accounts outside the United States are required to file FinCEN Report 114, commonly referred to as the FBAR. This requirement is imposed by the Bank Secrecy Act. The law has been in place since 1970, but many people subject to the FBAR filing requirement have only recently learned of the law. This is due in large part to the IRS’s ramped up enforcement of FBAR filing in recent years.
The FBAR is required to be electronically filed when the aggregate balance of all financial accounts outside the United States is over $10,000. FBARs have always been due on June 30 for the preceding year with no available extension. For example, the FBAR for 2015 was due on June 30, 2016. That is changing for 2016 FBARs. The due date for filing of FBARs will now correspond with the due date for filing individual income tax returns. 2016 FBARs will be due on April 18, 2017.
Also new to FBAR filing this years is that taxpayers may now obtain a maximum six month extension to file. FBAR enforcement is handled by the IRS, but filing is administered by the Financial Crimes Enforcement Network, AKA FinCEN. FinCEN will be giving the six month extension automatically. According to their website “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.” While no action is necessary to obtain an extension at this time, that could change in the future if a procedure is implemented similar to the procedure for requesting an extension of time to file an individual income tax return.
For taxpayers who have missed an FBAR filing deadline in the past, there are options to correct that filing omission. Options include the Offshore Voluntary Disclosure Program, Streamlined Filing Compliance Procedures, or Delinquent FBAR Submission Procedures. Choosing a viable option is highly fact specific and a tax professional should be consulted.