Although the tax extension of the federal income tax filing and other tax deadlines for individuals has been extended to May 17, 2021, The Internal Revenue Service (IRS) wants to remind U.S. citizens, resident aliens, and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is still April 15, 2021. The May 17, 2021 deadline for individuals does not affect the FBAR filing requirement deadline.
FBARs, which are known also as FinCEN Form 114, are forms required under the Bank Secrecy Act. The IRS is asking U.S. persons or entities with foreign accounts to confirm if this filing requirement applies to them or not. A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate, or trust.
Who must file an FBAR:
- Financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund, or other financial accounts in a foreign country, and
- The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
How must it be filed:
The 2021 FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) and is only available through the BSA E-Filing System website. Taxpayers who are unable to e-file their FBAR must call FinCEN at 800-949-2732, from outside the U.S. 703-905-3975.
What penalties are there for failure to file an FBAR:
There are significant civil and criminal penalties that can result in a fine and/or prison if one does not file an FBAR; however, the IRS may not penalize if they determine there was reasonable cause for late filing.
If you have questions about your FBAR filing requirements, including how signatory authority impacts your situation, Calvetti Ferguson can help. For additional information click here to fill out our contact form and a member of our team will follow up with you promptly.