Deadline Notice:
The Foreign Account Tax Compliance Act (FATCA) filing deadline for the Report of Foreign Bank and Financial Accounts, known as the (FBAR) is still June 30, 2015, but now has expanded its application to individuals.
However this time it is different!
New individuals and entities now fall under this heavily penalty reporting mandate. Here are the new individuals and entities that will require filing this extensive disclosure and reporting form, only electronically:
1. U.S. person who has a financial interest in, or signature authority over, at least one financial account located outside of the United States; and the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported. “U.S. person” includes:
• U.S. citizens
• U.S. residents
• Entities created or organized in the U.S. or under U.S. laws, including but not limited to:
[udesign_icon_font name=”fa fa-arrow-circle-right” color=”#81d742″] corporations,[udesign_icon_font name=”fa fa-arrow-circle-right” color=”#81d742″] partnerships or
[udesign_icon_font name=”fa fa-arrow-circle-right” color=”#81d742″] limited liability companies
• Trusts or Estates formed under the laws of the U.S.
• U.S. residents classified as non-residents under the treaty tie-breaker provisions of a double tax treaty are required to file an FBAR even though excused from IRS Form 8938.
• U.S. persons owning more than 50% of a foreign entity are responsible for filing an FBAR with respect to foreign accounts held by the foreign corporation with the same deadline of June 30, 2015.
The Foreign Bank Account Reports, FBAR, requires reporting the “maximum value of the account” at any one day during the calendar year to the IRS on an annual basis. FBARs must be e-filed, and no extensions of the FBAR due date are permitted. Severe penalties of up to $100,000 or 50% of the account balance for each year of violation, whichever is greater, may be imposed for failure to comply with the FBAR requirements.
The FBAR reporting requirement may be imposed on more than one person having a financial interest or signature authority over a financial account. Consequently, it is possible for both a corporation and its officers to face FBAR filing responsibility. As a result, both companies and their employees should be made aware of possible filing requirements and the accompanying penalty exposure for any compliance failure.
Conclusion:
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR). You should seek the advice of legal counsel on these matters before you prepare to make your June 30, 2015 filing deadline.
