June 8, 2016
Do you know about the June 30 tax deadline?
Most people only remember April 15 when thinking about taxes. For those with an aggregate interest of at least $10,000 in foreign accounts, June 30 is another date to remember for one more year. It is the filing deadline for Form 114, Report of Foreign Bank and Financial Accounts (FBARs).
You may be surprised to learn that the some of the interests that trigger this requirement include inherited assets, joint accounts with parents living in another country and even online gaming accounts. For calendar year 2015, the FBAR needs to be filed by June 30, 2016. There is generally no extension.
Changing filing deadlines in 2017
Next year, the filing deadline for the 2016 calendar year moves to the standard tax deadline of April 15, 2017. An extension of six months will also be allowed.
As we have written before in this blog, FBAR awareness has been increasing over the last decade. Last year, the number of filing surpassed the one million mark for the first time. The Treasury Department’s Financial Crimes Enforcement Network (FinCen) reportedly received 1,163,229 FBARs last year. This was an increase of eight percent on the prior year.
There still remain many U.S. taxpayers who do not fully understand the broad reporting requirements, however.
Electronic filing requirements
FinCEN forms are generally filed electronically. The system does offer an option to explain a late filing, but if you have not been compliant for several years it is imperative to speak with a skilled taxation attorney. If you need to come into compliance, speak with an experienced Brown P.C. attorney about possible options such as the offshore voluntary disclosure program.
Penalties for failing to file an FBAR are punitive. These can be assessed cumulatively for each year that was missed. Penalties can easily take a good chunk of the assets that have accumulated in a foreign account.