New Due Date for Foreign Bank Account Reporting
If you’ve ever filed a foreign bank account report (FBAR), then June 30 may be ingrained in your memory as the filing deadline. It had been crucial to remember that date for two reasons:
- It was out of sync with other individual filing deadlines
- There was no extension available
In my practice, I saw taxpayers fall into the trap of extending his or her income tax return to October, but forgetting to file the FBAR by the June 30 deadline. Now this problem is a thing of the past.
What Is A Foreign Bank Account Report?
U.S. persons are required to file an FBAR form with the US Treasury listing all non-US bank and financial accounts under the following conditions:
- If on any day of any calendar year such US person (e.g., US citizen, green-card holder, corporation, charity, or trust) has ownership of or signature authority over non-US bank and financial accounts
- These accounts have an aggregate (total) balance greater than the equivalent of $10,000.
The New Foreign Bank Account Report Due Date
At last, Congress passed a law resolving this due date disparity. Beginning in 2017 (reporting for the 2016 calendar year), the FBAR will share the same deadline as individual income tax returns: April 15.
Under the new FBAR filing rules, the FBAR filing deadline for U.S. citizens and residents residing abroad will be extended automatically until June 15th, with an additional four-month extension available until October 15.
The new FBAR rules also give the federal government the authority to waive penalties for first-time FBAR filing taxpayers who failed to request an extension to file on time. To obtain the penalty relief, the taxpayers must file the FBAR by October 15. It is unclear how a taxpayer will request an extension to file a FBAR as we are still awaiting guidance.
Know that the new provisions do not change the fact that the FBAR must be filed electronically with FinCEN, separate and apart from the taxpayer’s income return.