The Financial Crimes Enforcement Network (FinCEN) has announced that mandatory e-filing of the Report of Foreign Bank and Financial Accounts (FBAR) has been delayed until July 1, 2013.
The FBAR is an annual form (TD F 90-22.1) that certain US persons need to file with the US Treasury Department by June 30 of each year. Note, it is not filed with any tax return.
The form needs to be completed if a US person has a financial interest or signature authority over foreign financial accounts exceeding an aggregate value of $10,000 at any time in the calendar year. Financial account is widely defined and includes not only bank accounts, mutual funds and brokerage accounts but also defined contribution pension funds. This final category will often be the reason that many Green Card holders and those who have acquired US Citizenship will be required to file the FBAR.
US person includes not only US citizens and residents but also US corporations, partnerships and LLCs.
The penalty for failing to file the FBAR by the deadline of June 30, can be up to $10,000 or a minimum of $100,000 for willfully failing to file the FBAR.
Even though the mandatory e-filing of the FBAR has been delayed, FinCEN is encouraging all filers to e-file their FBAR.
If you want to e-file your FBAR it is a relatively simple process of setting up a user account on the FinCEN web site and then using their forms reader to complete the form. Currently they only support one signature. So if a married couple want to e-file a FBAR for jointly owned foreign financial accounts they will each need to register and file separate FBARs.
Here is the link for the user enrollment on the FinCEN web site.
One final point to remember. Even if you have already reported your foreign financial accounts with your tax return on Form 8938, Statement of Specified Foreign Financial Assets you still need to report them on the FBAR. The reporting obligations are completely separate.
The IRS has a useful comparison chart showing the differences between the two reporting requirements and which assets are covered by each form.
Posted by Mark Smith a tax preparer and accountant with over 28 years tax and accounting experience. He is the owner of Cranmere Accounting and Tax Services LLC and can be contacted on (480) 363-4808 or by email at firstname.lastname@example.org if you need any assistance with filing your FBAR.
Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.