Tax season is coming to a close—or is it?
Tax Day was particularly hectic this year. Originally scheduled for April 17, computer glitches at the Internal Revenue Service (IRS) gave filers one more day to file a return or file for an extension.
While April 17 got all the press, there are other deadlines to remember if you live or hold assets abroad. Here are some points to keep in mind:
Report of Foreign Bank and Financial Accounts (FBAR): The deadline to file your FBAR report now coincides with Tax Day, April 15, or thereabouts depending on weekends and holidays. The FBAR is required of US citizens or entities that have ownership or signature authority over a foreign-held financial account, like a trust account, bank or other account that had a value of $10,000 US at any time during the reporting year.
The FBAR, Form 114, is not filed like a regular tax return. It is filed with the Financial Crimes Enforcement Network (FinCen) and submitted through the Bank Secrecy Act (BSA) electronic filing system. For FBAR filers, the BSA system offers better security, faster submission, and better overall storage, and report processing.
To accommodate FBAR filers, an automatic extension is granted until October 15 of each year. In the past, no extensions were provided and the FBAR was due on June 30. You do not need to file for an individual extension if you missed the April 17 deadline because it is automatically granted —but you do need to file by October 15, 2018.
Goodbye Offshore Voluntary Disclosure Program: As we discussed earlier, the IRS is closing down the OVDP program on September 28, 2018. The OVDP offers taxpayers who are out of compliance an opportunity to voluntarily disclose foreign financial assets, and bring their accounts current without exposure to a criminal tax charge.
The program offers structure for paying tax and penalty obligations without fear of triggering a criminal tax audit. The IRS is sunsetting the OVDP because the number of people using the program has declined, and awareness of obligations concerning offshore tax issues has improved.
Calling all taxpayers, wherever you are: If you are a US citizen or resident alien living and working outside the US or Puerto Rico, you will likely need to file an income tax return—even if your tax liability is little to nothing. The filing of your return is required in order to take advantage of rules that alleviate the payment of taxes.
For those living abroad, including members of the military, the filing date for your tax return is June 15, 2018.
Filing the right return on time with values reported in US dollars is important to avoid attracting the attention of the IRS. And if you or your business receives notice of an IRS tax audit—talk to a knowledgeable tax attorney for advice and representation.
Trusted advice from experienced FBAR attorneys in Cleveland
Whether you had prior knowledge, or you just discovered a significant problem with offshore reporting, a payroll tax issue, or other problem, our tax attorneys can help. At Robert J. Fedor, Esq., LLC we provide confidential, appropriate solutions to tax problems with private wealth and corporate assets. Contact us or call 800-579-0997 today.