Taxpayers with foreign bank or financial accounts are being reminded that time is running out to file the yearly report of their holdings.
The annual Report of Foreign Bank and Financial Accounts (FBAR) is due on Oct. 15.
The deadline applies to any U.S. citizens, resident aliens or any domestic legal entity holding bank or other financial accounts outside the country.
Originally, the deadline for filing the FBAR was April 15 of this year, but late filers got an automatic extension to file until Oct. 15.
Taxpayers did not have to request the extension.
However, those taxpayers who live in a federally designated disaster area—such as a location hit by a hurricane or tornado—may have their FBAR filing date delayed even further, but should consult the latest FBAR Relief Notices for information specific to their area.
Who should file?
Taxpayers are required by the Bank Secrecy Act to file an FBAR if:
- The taxpayer has a financial interest in, signature authority or other authority over one or more accounts, such as a bank or brokerage account, mutual fund or other financial account located outside the United States, and
- The aggregate value of all their foreign financial accounts exceeds $10,000 at any time during the calendar year.
The Internal Revenue Service wants all U.S. persons or entities who have foreign accounts—even relatively small ones—to see if the filing requirements apply to them.
The IRS defines a “U.S. person” as a citizen or resident of the U.S. This definition also encompasses domestic legal entities, including partnerships, corporations, limited liability companies, estates and trusts.
Filing the FBAR has to be done electronically with the Financial Crimes Enforcement Network, known as FinCEN. Taxpayers are required to use the BSA E-Filing System website to file their FBAR. The report should not be filed with a federal income tax return.
If taxpayers cannot e-file their FBAR, they should call FinCEN at 800-949-2732; taxpayers calling from outside the U.S. should call 703-905-3975.
Simply not filing an FBAR should not be considered an option when the report is required. Those who attempt to avoid filing could face considerable civil and criminal penalties – including fines and prison time.
However, the IRS says it will not penalize a taxpayer who reported an account properly on a late-filed FBAR, if the agency finds a reasonable cause for the missed deadline.
For more information on the FBAR and filing the report, see these resources:
Source: IR-2021-196
Trussell Tax