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  • New FBAR Deadline For FBAR Filing

    New FBAR Deadline For FBAR Filing

    On the 16th of December 2016, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an announcement that the new annual date for filing Reports of Foreign Bank and Financial Accounts (FBAR) is April 15th (April 18, 2017 this year since April 15 falls on a Saturday) instead of the June 30th deadline.

    This date change was enacted as part of the Surface Transportation and Veteran Health Care Choice Improvement Act of 2015 (Public Law 114-41) which was passed by Congress and signed by the President on July 31, 2015.

     

    What Does This Change Mean?

     

    This change is meant to benefit taxpayers by aligning the FBAR due date with the due date of the individual federal income tax returns (April 15). This will eliminate confusion for taxpayers having to submit financial reports on two separate due dates.   

    Accordingly, the due date for FBAR filings for foreign financial accounts maintained during the calendar year 2016 is April 18, 2017, consistent with the federal income tax due date. In the event that the taxpayer files for a six-month federal income tax extension, the Act also mandates a maximum six-month extension of the FBAR filing deadline. In this case, both the federal tax return and the FBAR filing with coincide on the October 15 deadline.

    Unlike the federal tax return extension which requires submitting Form 4868, the FBAR filing extension requires no specific requests. The FBAR filing six-month extension is done automatically if the April 15 due date is not met. No extension is granted beyond the October 15 deadline.   

    The new law did not change the requirement that the FBAR be filed electronically with FinCEN Form 114, nor did it eliminate the requirement to file Form 8938 with a tax return to report certain foreign holdings. Information presented on both financial reports FinCEN 114 and 8938 should match, and filing the two forms at the same time will prevent any mistakes or disparities.

    Many times the filing of an FBAR for the first time can lead to possible issues and a red flag for past years in which an FBAR was due but not filed. The filing of an FBAR should not be taken lightly based on the potential large penalties for errors. Consult former IRS tax attorney Vic Abajian who has extensive experience with IRS domestic streamlined offshore disclosures and IRS foreign streamlined offshore disclosures. He can be reached at 818-396-5059.