While it seems like 2020 has been one long disaster, the Internal Revenue Service (IRS) stepped up to offer some filing relief for those who are required to file a 2019 Report of Foreign Bank and Financial Accounts (FBAR) who have been hit particularly hard by natural disasters.
The 1970 Bank Secrecy Act of requires an FBAR report from individuals who own or have interest in a foreign bank account. The threshold amount is $10,000 aggregate value over funds held in accounts on foreign territory. Other FBAR points include the following:
- If the account, or collected accounts, reach $10,000 at any time during the calendar year, a FBAR report is required. Many filers wrongly believe the requirement applies only at the end of the calendar year.
- Tax qualified and individual retirement accounts are not subject to FBAR reporting.
- A FBAR is required of any “US person” who owns an interest in a qualifying account. If an account is placed in the name of a child, a parent or guardian must file an FBAR on their behalf.
- FinCEN Form 114 is the FBAR report and is filed with FinCin not with the IRS.
While not filed with a federal tax return, an FBAR is due at the same time as federal income tax returns on April 15 of each year. That said, the IRS automatically extends the deadline for FBAR filers to October 15 of each year without the need to apply for the extension. This year, given the ongoing pandemic, the IRS further extended the FBAR filing deadline to October 30, 2020, which has now passed.
In addition, certain FBAR filers in identified disaster areas have now had the deadline pushed back further to December 31, 2020. These persons include individuals who are in, or whose banking documentation lies within, areas impacted by:
- The California Wildfires
- Hurricanes Laura and Sally
- The Iowa Derecho
- Oregon Wildfires
If you are located within the vicinity of one of these disasters, take a look at the press release for more information on areas and counties considered within the relief area.
Whichever deadline applies, be sure your FBAR is filed on time. If behind on your report, speak with a tax professional for help.
Speak to our tax attorneys if you are contacted by the IRS on a civil audit or criminal tax matter
Serving international and local clients from offices in Chicago and Cleveland, Illinois, Robert J. Fedor, Esq., LLC provides strategic representation and dedicated legal service. Call or contact us at 800-579-0997 if you are concerned about tax litigation or other tax controversy.