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Friendly FBAR Reminder from FinCEN

The Financial Crimes Enforcement Network (FinCEN) just issued its announcement (“Announcement”) of the due date for filing the 2017 FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the notorious “FBAR”), to report foreign financial accounts held in 2017.

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the “Act”), changed the FBAR’s due date to April 15 to coincide with the due date for filing federal income tax returns. The FinCEN Announcement reiterated that the FBAR filing deadline will follow the Federal income tax due date guidance – when the Federal income tax due date falls on a Saturday, Sunday or legal holiday, the due date is delayed until the next business day.

FinCEN’s Announcement reminded us that the 2017 FBAR due date is April 17, 2018, the same due date for individual federal income tax returns. This is so because April 15 (the usual due date for income tax returns) falls on a Sunday and April 16 is a holiday in the District of Columbia.

The legislation changing the FBAR due date also provides for an automatic six-month extension.  This means that the extension for the 2017 FBAR is  until October 15, 2018. FinCEN reminded filers that specific requests for the extension are not required.  You need do nothing specific to obtain the extension and need only file the FBAR no later than October 15.

FBARs must be filed electronically on FinCEN’s Bank Secrecy Act (BSA) E-Filing System website.

Converting Foreign Currency to US Dollars to Determine Filing Thresholds and to Complete the Forms

FBAR requires reporting of the foreign financial accounts in United States Dollars. In order to complete the form, the taxpayer must first determine  the maximum value of the asset during the tax year, and then convert the local currency into US dollars. Taxpayers are to use the exchange rate on the last day of the calendar year. The taxpayer must use the U.S. Treasury Bureau of the Fiscal Service foreign currency exchange rate for purchasing U.S. dollars.

Treasury 2017 Exchange Rates Posted

Sometimes the rate for the last day of the year is not posted in a timely fashion. Luckilythe December 31, 2017 rates have been posted and can be found here.

Need Historical Exchange Rates?

During the course of information gathering for the current year’s tax filing, a taxpayer may discover that some forms were completed incorrectly in the past and should be amended or, perhaps the taxpayer discovers a filing should have been done, but was not. When taxpayers are filing late or amended FBARs (or late or amended Forms 8938), they need to use the conversion rates for the relevant tax year. The historical exchange rates for conversion to US dollars are available on the IRS website here. 

Want more facts about FBAR?  Read my blog post here  — fast and digestible!

 

 

All the US tax information you need, every week — Just follow me on Twitter @VLJeker (listed in Forbes, Top 100 Must-Follow Tax Twitter Accounts 2017 and 2018)


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