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What you need to know about the June 30 FBAR deadline

On Behalf of | Jun 20, 2016 | Tax Controversies

If your investment portfolio includes funds held in an overseas account, you need to pay attention to an upcoming tax filing deadline. U.S. persons (this includes citizens and residents) with an interest, even a signature interest, in a foreign account need to pay attention.

An account or combination of foreign accounts with an aggregate balance of $10,000 or more in 2015 will trigger the reporting requirement. Form 114, Report of Foreign Bank and Financial Accounts (FBAR) needs to be efiled by June 30. There are no filing extensions.

Types of accounts and “persons” required to file

The broad disclosure requirement includes foreign insurance policies, inherited assets, joint accounts with parents who reside abroad and retirement assets.

It is not just individual filers who must disclose offshore accounts. Partnerships, trusts and corporations with offshore holdings may also have to comply with the reporting requirements.

Change in filing deadline in 2017

Next year, the filing deadline will move to April 15, 2017 to correlate with the individual tax return filing deadline. There will be a 6-month extension available for FBARs. This should make it easier to comply.

The Treasury Departments’ Financial Crimes Enforcement Network (FinCen) reported that it received 1,163,229 FBARs last year. Year-over-year filings have increased by double digits for four of the last five years as more taxpayers learn about the broad reporting requirements.

Record keeping

You need to keep information about each foreign account including the following:

  • Account number or designation
  • The name and address of the foreign financial institution
  • Type of account
  • Maximum account value each year

Hold onto these records for at least five years. A copy of the FBAR filing can also satisfy the record keeping requirement.

If you have questions about whether you need to disclose an account, speak with an experienced tax attorney. When you have failed to file for a number of years, several programs could help. Because civil penalties are very serious, take care when coming into compliance.

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