June 30, 2014 – Don’t Forget the Deadline – No Extensions
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 Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Look below to see if you must now file Form 114 or your preparer to file Form 1114a.
Current FBAR Guidance
FinCEN introduces new forms
On September 30, 2013, FinCEN announced FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form). FinCEN Form 114 supersedes longstanding TD F 90-22.1 (the FBAR form that was used in prior years) and is now only available online through the BSA E-Filing System website. The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Form 114. It also offers an option to “explain a late filing,” or to select “Other” to enter up to 750-characters within a text box where the filer can provide a further explanation of the late filing or indicate whether the filing is made in conjunction with an IRS compliance program.
On July 29, 2013, FinCEN introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf. The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request.
Filing deferral for certain individuals with signature authority only, effective through June 30, 2015
Interesting to note, FinCEN extended the due date for filing FBARs by certain individuals with signature authority over, but no financial interest in, foreign financial accounts of their employer or a closely related entity, to June 30, 2015.
FinCEN has provided no extension to file form 114 of 114a. Falilure to timely file has increased and substantial penalties.
You should immediately plan to file this form if you find your financial situation covered by FinCEN. Be prepared to have all of your foreign account information at your fingertips as you begin to prepare the form 114 or 114a online, only, so you can complete its filing. You may use your Tax Attorney to file on your behalf and, especially, if you are going to us this form to explain why you failed to file past FBAR form, 90-22.1.