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New Year, New FBAR Rules

So far the New Year is looking a bit brighter! Here’s a reminder that the new annual due date for filing Form 114, Reports of Foreign Bank and Financial Accounts, (FBAR) for foreign financial accounts is April 15.  This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act).  The Act changed the FBAR due date to April 15 to coincide with the due date for the filing of individual income tax returns.  The Act also mandated a maximum six-month extension of the FBAR filing deadline.

Prior to these law changes, the FBAR was due on June 30th.  To  the ordinary individual this was a seemingly nonsensical date that did not coincide with any other individual income tax return deadline.  Furthermore, absolutely no extensions were permitted.

FinCEN Brings Joy for the New Year

To implement the new law with minimal burden to the public and FinCEN, FinCEN announced it will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year.  Since this six-month extension will be “automatic” each year, taxpayers do not have to request any extension.

What Does This Mean for Your 2016 FBAR?

Since the FBAR filing due date is now to be consistent with income tax return filing deadlines, the 2016 FBAR will be due on April 18 2017 because April 15 is a Saturday, the 16th, a Sunday and the 17th, a Monday, is “Emancipation Day”, a holiday in Washington D.C.  (I note, the 18th is what is stated in the FinCEN announcement, but it did not mention the reason or clarify that the 17th is a holiday).

Taxpayers should be aware that when a statutory due date falls on a Saturday, Sunday, federal legal holiday, or a holiday in the District of Columbia, the due date is delayed until the next day that is not a Saturday, Sunday, or legal holiday.  A statewide legal holiday will delay a due date only if the IRS office where the taxpayer is required to file his tax return is located in that state.

FinCEN’s automatic six-month extension will run until October 16, 2017, because October 15 falls on a Sunday, assuming the same extension rules apply as under the income tax rules. I am trying to clarify this issue with FinCEN.

Watch this space for updates!

UPDATE January 6 2017 – FinCEN Resource Center has advised that “[w]hile FinCEN has not yet officially stated that the six-month extension will coincide with the Federal income tax extension of October 16, 2017, there will likely be a notice or statement released to provide clarification. The new due date for FBAR filings was established to coincide with the Federal income tax due date, therefore the six-month extension will likely coincide as well. That being said, since there has not been an official statement made that says this, at this time filers should be prepared to adhere to the publicized deadline for the six-month extension which is October 15, 2017. This may be subject to change due to October 15, 2017 falling on a Sunday, so I would encourage you to sign up for FinCEN Updates to be notified. You can sign up for FinCEN Updates by visiting the Newsroom section of our website.”

I then received a follow-up that stated:

“After consulting with our policy department this morning, while an official statement has not yet been released, I can confirm that the FBAR six-month extension due date for 2017 will in fact be October 16, 2017.”

Readers — I’d play it safe – for your 2016 FBAR, file no later than the October 15 deadline! Just call me extra careful when it comes to talk…  

Children and FBARs

Don’t forget, even children must file the so-called FBAR if it is required!   So, if Santa was generous and tipped junior’s foreign bank balance over $10,000, be sure to have junior file an FBAR.

If the child cannot file his or her own FBAR for any reason, such as age, his parent, guardian, or other legally responsible person must file it.  If the child cannot sign his or her FBAR, a parent or guardian must electronically sign the child’s FBAR.  At Item 45 on the FBAR form, “Filer Title”, one should enter “Parent/Guardian filing for child”.

Fast & Digestible FBAR Facts

Want more fast & digestible FBAR facts?  Visit my US tax blog posting here.

Follow me on Twitter: @VLJeker

 

 

 


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