If you possess a foreign bank account of a certain size, this message is for you. Your FBAR report is due very soon.
Following the edict of the Bank Secrecy Act, the Report of Foreign Bank and Financial Accounts (FBAR) for all U.S. persons to which the Act applies, is due on October 15, 2021. Though not filed as part of an annual tax return, an FBAR can be submitted on Tax Day, April 15. That said, FBAR filers are automatically granted an extension to October 15 each year.
As that deadline approaches this year, the Financial Crimes Enforcement Network (FinCen) recently announced the October deadline for filing of FBARs for the 2020 calendar year is pushed back to December 31, 2021 for filers who live in areas affected by natural disasters. FinCen lists the following events in mentioning FBAR deadline relief:
- California wildfires
- Hurricane Ida
- Tropical Storm Fred
FinCen notes that list may expand if additional areas are designated for relief by the Federal Emergency Management Agency (FEMA).
The IRS is no longer forgiving of those who fail to file their FBAR in a timely manner. The thinking goes that if you have an interest in foreign-held assets, you should be aware of regulatory deadlines for your financial reports. The bottom-line requirements for filing an FBAR include:
- U.S. persons with an interest, authority, or ownership in one or more accounts located outside of the U.S. must file a FBAR if the holdings reach a threshold limit. This could be a bank account brokerage account, fund, or money in an offshore tax haven.
- In order to file an FBAR, the accounts (any one or all) must reach $10,000 at any time during the calendar year. This means if the total amount of your offshore interest reaches $10,000 during the year, an FBAR filing is in order.
FBAR penalties are significant. If you are not eligible for an additional extension this year, it is important to meet the October 15 deadline. FBAR filings are made through the BSA E-Filing System. If you have forgotten the report until now, speak with your accountant or a local tax lawyer for assistance with getting your numbers together and your report submitted on time.
Speak with an experienced tax attorney about your offshore interests, FBAR or tax controversy
The experienced tax lawyers at Robert J. Fedor, Esq., LLC provide strategic solutions to complicated tax problems for businesses and individual clients around the world. When you need focused advice or if you have been contacted by the IRS—contact us or call 800-579-0997. We have offices in Cleveland and Chicago.