2016 FBAR (form 114) Gets an Automatic Extension of Time to File for 2016

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced that, to implement the new due date for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), of April 15 (April 18 for 2017), it will automatically grant all taxpayers filing the form a six-month extension every year to Oct. 15 (which will be Oct. 16, 2017, because Oct. 15 is a Sunday). FinCEN explained that this six-month extension will be automatic each year and that taxpayers do not have to request extensions.

Section 2006(b)(11) of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, P.L. 114-41, changed the due date of FBARs to April 15 to coincide with the due date for individual income tax returns. Before the change, the form was due on June 30, a date that did not coincide with any other individual income tax return deadline, and no extensions were allowed.

The Bank Secrecy Act, P.L. 91-508, and its regulations require FBAR reporting from “[e]ach United States person having a financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country” (31 C.F.R. §1010.350(a)), if the aggregate maximum values in that person’s foreign accounts exceed $10,000 at any time during the calendar year (31 C.F.R. §1010.306(c)).

- See more at: http://www.thetaxadviser.com/news/2016/dec/fbar-automatic-extension-201615731.html#sthash.4xTfczcV.dpuf

Delinquent FBAR Submission Procedures

Taxpayers who do not need to use either the OVDP (described in section 1 above) or the Streamlined Filing Compliance Procedures (set forth in section 2 above) to file delinquent or amended tax returns to report and pay additional tax, but who:

(1) have not filed a required Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN Form 114, previously Form TD F 90-22.1),
(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 the delinquent FBARs according to the FBAR instructions and include a statement explaining why the FBARs are filed late.  All FBARs are required to be filed electronically at FinCen.  On the cover page of the electronic form, select the reason for filing late.  If you are unable to file electronically, you may contact FinCEN's Regulatory Helpline at 1-800-949-2732 or 1-703-905-3975 (if calling from outside the United States) to determine possible alternatives to electronic filing.  
The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.

FBARs will not be automatically subject to audit but may be selected for audit through the existing audit selection processes that are in place for any tax or information returns.

Foreign Bank and Financial Account Forms Must Be Filed On Line by 6/30/14

Who Must File an FBAR by 6/30/14

United States persons are required to file an FBAR if:

1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts (this includes banks, stock brokerage accounts, cash surrender value of foreign life insurance, foreign pension plans in most situations) exceeded $10,000 US dollars at any time during the 2013 calendar year to be reported.

United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

Exceptions to the Reporting Requirement

Exceptions to the FBAR reporting requirements can be found in the FBAR instructions. There are filing exceptions for the following United States persons or foreign financial accounts:

• Certain foreign financial accounts jointly owned by spouses;
• United States persons included in a consolidated FBAR;
• Correspondent/nostro accounts;
• Foreign financial accounts owned by a governmental entity;
• Foreign financial accounts owned by an international financial institution;
• IRA owners and beneficiaries;
• Participants in and beneficiaries of tax-qualified retirement plans;
• Certain individuals with signature authority over, but no financial interest in, a foreign financial account;
• Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust); and
• Foreign financial accounts maintained on a United States military banking facility.

Review the FBAR instructions for more information on the reporting requirement and on the exceptions to the reporting requirement.

Reporting and Filing Information

A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. The reporting obligation is met by answering questions on a tax return about foreign accounts (for example, the questions about foreign accounts on Form 1040 Schedule B) and by filing an FBAR.

The FBAR is a calendar year report and must be filed on or before June 30, 2014 for the calendar year 2013 foreign bank and financial account balances. Effective July 1, 2013, the FBAR must be filed electronically through FinCEN’s  BSA E-Filing System. The FBAR is not filed with a federal tax return. A filing extension, granted by the IRS to file an income tax return, does not extend the time to file an FBAR. There is no provision to request an extension of time to file an FBAR.

A person required to file an FBAR who fails to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10,000 per violation for nonwillful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,000 or 50% of the balance in the account at the time of the violation, for each violation.  For guidance when circumstances such as natural disasters prevent the timely filing of an FBAR, see FinCEN guidance,FIN-2013-G002 (June 24, 2013).

U.S. Taxpayers Holding Foreign Financial Assets May Also Need to File Form 8938

Taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets, which is filed with an income tax return. The new Form 8938 filing requirement is in addition to the FBAR filing requirement. A chart providing a comparison of Form 8938 and FBAR requirements may be accessed on the IRS Foreign Account Tax Compliance Act web page.

IRS FBAR 114 REFERENCE GUIDE FOR TAXPAYERS

Download this excellent PDF reference guide to FBAR filing with answers to most questions. Need help or have further FBAR for Form 114 questions, write us at ddnelson@gmail.com. Remember FBARS now must be filed on line at   FBAR FILING SITE   and are due 6/30/14 for 2013 and cannot be extended.

Expat Tax Return Deadlines

Here are the most important tax filing deadlines for expatriates:

April 15th – US tax deadline to pay any US taxes owed (or penalties and fines begin to accrue). US expats get an automatic 2-month extension.

June 16th – US tax return deadline for expats

June 30th – FBAR forms are due to the US Department of the Treasury. Expats must file if they have had $10,000 or more in foreign bank and financial accounts. No extensions are or can be granted

October 15th – Final expat deadline for those who filed for an extension

If you are concerned that you won't be able to get your returns ready in time, you're not alone! Get started with with our help today by  downloading our expat tax questionnaire at www.Taxmeless.com. We offer a simple process, reasonable fees and expat tax experts who will make your US tax preparation quick and easy.
 

FBAR NEW FILING METHOD PUZZLE?

Foreign Bank Accounts, IRS, FinCEN & Catch-22 http://www.forbes.com/sites/robertwood/2013/08/20/foreign-bank-accounts-irs-fincen-catch-22/

FBAR Must be filed On Line by June 30, 2013 for 2012 - On Line Form Has a Flaw which may cause trouble

The FBAR form (TDF 90-22.1) (report of foreign bank and financial accounts) must be filed by 6/30/13 on line to avoid potentially horrendous penalties.  The process is fairly simple, but has one glitch. After you

register, and are given access to the form (which looks just like the paper form), to finally submit the form you must enter a PIN number which the screens says was sent to you by email (at your the email address you gave when you registered). That statement often is not true. Many have never received a pin number by email and you cannot file the form without the  8 digit PIN number.

You can get your pin number by going back to the main screen and looking at the left hand column for the link there that mentions PIN in its description.  Click on that link and you can then receive a new PIN number and then go back to the submission screen, enter it, and you are done. Be certain to print out your proof of filing and keep track of your user name and password for next year.  This handy hint may save you 40 minutes or more waiting on the help line for them to explain to you that the website is not correct and then tell you where to find the PIN number.

The link to register to file your FBAR on line is at:  http://bsaefiling.fincen.treas.gov/Enroll_Individual.html

After June, paper form filings will not be allowed. If you try to file on paper, your form must arrive by 6/28/13.  Unlike tax forms, date of postmark does not count!

FILE YOUR 2012 FBAR (TDF 90-22.1) ON BEFORE 6/28/13 ON LINE

You can file your FBAR form for 2012 on line in order to meet the 6/28/13 filing deadline. Got to  http://bsaefiling.fincen.treas.gov/Enroll_Individual.html to file it.  Print out a copy while there so you have proof it was filed.

The penalty for not filing  this Report of Foreign Bank and Financial Accounts can be $10,000 or more as well as the possibility of criminal prosecution in the event the IRS can show you intentionally did not file the form.  It is not a tax form, but a reporting form with tremendous penalties for not filing. 

Accelerated FBAR Filing Deadline in 2013

In general, FBARs must be received by the U.S. Treasury Department by
June 30. Because June 30, 2013, falls on a Sunday, FBAR filers should
plan to have their 2012 FBARs received by Treasury by Friday, June 28,
2013. Unlike income tax filings, the FBAR due date is not extended to the
next business day when the deadline falls on a weekend. In addition,
unlike income tax filings, there is no “mailbox rule” with respect to
FBARs, so the deadline is measured by the date received, not the date
sent.

 The FBAR should be delivered to the address shown in the
instructions to the FBAR (Rev. January 2012). A street address is provided
in the FBAR instructions if an express delivery service is used. Although
paper filings still are acceptable for timely filed 2012 FBARs, filings made
after June 30, 2013, are required to be done electronically (using the BSA
E-Filing System). 

Expatriate Tax Return Due Dates- Nonresident Tax Return Due Dates

 U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return, generally have an automatic two-month extension beyond the regular Apr. 15 deadline to file their returns. The June 15 deadline is extended this year to June 17 since the extended due date falls on a Saturday. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies.

Nonresident aliens who received income from U.S. sources in 2012 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be Apr. 15 or June 17 depending on sources of income.

U.S. citizens and resident aliens are legally required to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to fill out and attach Schedule B, Interest and Ordinary Dividends, to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.

Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds.

Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Treasury Department Form TD F 90-22.1. This is not a tax form and is due to the Treasury Department by June 30, 2013. Treasury encourages taxpayers to file it electronically.

June 17 soon approaching. IRS reminded taxpayers that the filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Taxpayers are reminded to attach to their return the statement described above.

Need help with these filings?. Contact us at ddnelson@gmail.comm or www.TaxMeLess.com