FBAR Filing Deadlines Are Approaching
All U.S. citizens are required to report their worldwide income to the Internal Revenue Service and that FBAR deadlines are fast approaching. The FBAR, or Report of Foreign Bank and Financial Accounts, has an upcoming deadline that’s unrelated to their usual April 15th income tax return filing deadline.
Under the Foreign Account Tax Compliance Act (or FACTA), both American citizens and resident aliens are required to report their worldwide income, including that in foreign bank accounts, foreign trusts and investment security accounts.
The IRS has a June 30th deadline for filing Reports of Foreign Bank and Financial Accounts, or FBARs. The relevant IRS form to report these accounts is a Form 114, and it needs to be electronically filed with the Financial Crimes Enforcement Network, or FinCEN, which is a part of the U.S. Treasury Department. Most of the time, taxpayers need to also disclose the country where those accounts are located.
As if that’s not complicated enough, it’s also important to recognize that taxpayers may also have needed to file a Statement of Special Foreign Financial Assets, or Form 8938, as a supplement to their income tax return to report certain foreign financial assets. If that wasn’t done for prior tax periods, taxpayers may need to amend their Income Tax Return with a Form 1040X.
The general threshold for filing FBARs depends on whether a taxpayer had an interest in one or more foreign financial accounts with a total value of more than $10,000 at any time in 2014. Significantly, the FBAR filing requirement is triggered if a taxpayer had signature or other authority over a foreign account.
Taxpayers that haven’t properly filed FBARs for one or more tax years should consider availing themselves of the IRS Offshore Voluntary Disclosure Program, or OVDP. OVDP is a tax amnesty program that allows qualifying taxpayers to file previously-unfiled FBARs without fear of criminal prosecution.
If you, or someone you know, has FBAR, OVDP or other IRS tax problems, contact the experienced New York tax attorneys at Mackay, Caswell & Callahan, P.C. today. With over 30 years’ of tax experience and offices throughout New York State, we can offer experienced tax help.