Missed the foreign bank account reporting deadline?
Filing the Foreign Bank Account Report (Fin. Cen. 114, popularly known as the FBAR) annually, is one of the most important tax-related responsibilities for US expats. This informational return is required for all U.S. persons who, individually or jointly, have signing authority, or a financial interest in foreign financial and bank accounts that, in total, a balance at any time during the year that exceeded $10,000.
Currently not filing an FBAR can result in civil penalties upwards of 10,000 dollars for non-wilful violators and up to ten times that for willful violators.
How do I file an FBAR?
For years after 2013, electronic filing is required. This requires taxpayers to either hire professionals with software compatible with the IRS’s E-filing system or sign up and report through the Financial Crimes Enforcement Network’s (FinCen) BSA E-filing system.
If you are unable to file electronically contact FinCen’s Regulatory Helpline at 1-800-949-2732 or 1-703-905-3975 (outside of the US) to see if there are possible alternatives to electronic filing.
When is my FBAR due?
For years after 2015 FBARs are due by April 15th, with an automatic 6-month extension.
I didn’t file – now what?
The IRS wants you to file your FBAR because it makes it easier for them to find income that needs to be taxed. Therefore, they will typically not impose a penalty for failure to file delinquent FBARs if you properly reported (and paid tax on) all the income from the foreign accounts on a tax return, and you currently are not under investigation by the IRS.
The official wording on the procedures state that taxpayers who do not need to use either the Offshore Voluntary Disclosure Program or the Streamlined Filing Compliance Procedures, to file delinquent or amended tax returns, but who: (1) have not filed the required FBARs, (2) are not under a civil examination or a criminal investigation by the IRS, and (3) have not already been contacted by the IRS about the delinquent FBARS should file all delinquent FBARs’ according to the FBAR instructions.
In addition to the standard FBAR instructions, delinquent FBAR filers should also include a statement explaining why they are filing the FBARs late.
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