Foreign accounts and required reporting: FBAR update for 2017
Those who hold foreign financial accounts may not understand the tax implications. In some cases, the presence of the account must be disclosed by filing certain forms. Depending on the amount, anyone holding a foreign account may need to file a Report of Foreign Bank and Financial Accounts (FBAR). This document is required by the Treasure Department’s Financial Crimes Enforcement Network (FinCEN).
Who has to file this document? As noted in the Bank Secrecy Act, any “United States person” with a “financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country” with an aggregate value over $10,000 is generally required to file an FBAR.
What happens if I don’t file an FBAR? A failure to file can lead to serious repercussions. The Internal Revenue Service (IRS) continues to focus on finding anyone that is not in compliance with these laws. If accounts are not disclosed, account holders and those with signature authority over the account can face steep financial penalties as well as jail time.
To make matters worse, the laws governing reporting requirements are often changing. Keeping up with the requirements can be difficult. Having a basic understanding of updates as they roll out can help.
Are there any recent updates? Yes. There was a change in the filing deadline. The deadline for filing an FBAR got bumped up to April 15th. Originally, this document was not due until later in the year.
However, the agency noted that anyone required to file this form will receive an automatic six month extension. As a result, as long as the document is filed by October 15th it should not be considered late.
Do I need to do anything to get this extension? No. As noted in a recent publication in the Journal of Accountancy, no action is required to receive this extension. The extension is automatic.