Foreign account reporting deadline June 30, 2016
TAX ALERT |
Taxpayers with an interest in, or signature authority over, bank or financial accounts located outside the United States may need to make certain disclosure filings by June 30, 2016. Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR), is due June 30 for those U.S. persons with foreign financial accounts having an aggregate value exceeding $10,000 at any point in 2015. FBARs must be filed electronically through the FinCEN BSA E-Filing System. With increased third-party reporting and global information sharing from implementation of the Foreign Account Tax Compliance Act (FATCA), U.S. taxpayers that fail to file their FBARs for reportable accounts face an increased likelihood of substantial penalties. Non-willful violations may trigger a civil penalty of $10,000 for each account not reported while willful violations may trigger a penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation. U.S. taxpayers with undisclosed foreign financial assets may be eligible to take advantage of the IRS offshore voluntary disclosure program to address prior year noncompliance, avoid substantial civil penalties, and generally eliminate the risk of criminal prosecution, where applicable.
Beginning with the 2016 calendar year FBARs, due in 2017, the due date for reporting will change from June 30 to April 15, matching the due date for filing individual income tax returns. For additional guidance on your FBAR filing obligations, it is prudent to seek advice from your tax advisor.