In a common sense move, Congress has moved the filing due date for the Report of Foreign Bank and Financial Accounts (FBAR) from June 30 to the better known April 15 U.S. tax filing deadline. The change, tacked onto a bill to extend the Highway Trust Fund, went into effect when President Obama signed the legislation on July 31.
Many taxpayers did not realize there were different filing deadlines. Thus, many expect that the coordination of deadlines will increase voluntary FBAR compliance.
If you have any interest in a foreign bank account with a balance over the $10,000 threshold, the foreign asset filing requirements applies to you. This is a broad rule and many taxpayers are still learning they need to file or should have been filing for years.
Six-month extension request
Many taxpayers who have requested extensions to file their tax returns in past years have been surprised to learn their extension request does not apply to the FBAR requirement. For the first time, taxpayers will have the option to request a six-month extension for FBARs. This is now consistent with general tax filing rules.
The Internal Revenue Service will have the authority to abate any first-time penalties if a taxpayer misses the April 15 deadline, but files before October 15. This change softens the agency position, however failing to file your FBAR by the October deadline could trigger civil and/or criminal penalties.
If you have not filed a FBAR, contact a tax attorney right away. There are proactive measures that you can take to limit penalties, but you need to proceed cautiously.
Source: Bloomberg, "Deadline Change For Foreign Bank Reporting Draws Praise," Allison Bennett, Aug. 6, 2015