FBAR in the News: Mandatory FBAR E-Filing Postponed but Paper Filing Still Required
As a citizen of the United Sates who lives abroad, you are still held accountable to the IRS via your US expat taxes. What many expats might not know is that they also have certain filing requirements with the US Department of the Treasury. One of the most common obligations expats have is to report the assets in their foreign bank accounts. This is the FBAR, or Foreign Bank Account Report, and you are required to file it (on Form TD F90-22-1) if the collective balance of your foreign accounts is or exceeds $10,000 at any point during the calendar year. Form TD F90-22-1 is relatively easy to complete and is nothing more than a report of your foreign assets.
New FBAR filing requirements
The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a new FBAR filing system in July 2011. This system—known as the BSA E-Filing System—is electronic and allows for online submission of the FBAR. In September, FinCEN announced that e-filing of the FBAR would be mandatory beginning June 30, 2011. June 30 is the annual FBAR due date.
If your foreign bank accounts exceed the current $10,000 threshold, this new requirement means that you will have to file your FBAR either via the paper form or electronically. The penalties for failing to file your FBAR electronically will be the same as the penalties you would face for failing to file the FBAR in its traditional form. Current penalties depend both on the reason for your delinquency and the value of your foreign account(s) but can still be quite severe regardless. Individuals who fail to file on time or at all could be subject to up to a $50,000 fine per offence, seizure of 50 percent of the highest foreign balance, or both. That said, the IRS, who enforces FBAR compliance, has been very lenient with US Expats when it comes to FBAR reporting.
FinCEN Postpones Mandatory e-Filing of the FBAR
According to the FinCEN, the new mandatory FBAR e-filing will be postponed until July 1, 2013. It is important to note, however, that your paper-filing requirements still stand. You will still be expected to file in its traditional form (Form TD F90-22-1) by the regular due date of June 30th. There are no extensions for the FBAR.
As mentioned, the penalties for failing to file your FBAR can be harsh. Your filing must be submitted to the US Department of the Treasury (not the IRS) by June 30 each year.
Questions About Your FBAR Requirements?
Because the FBAR is so important, we have dedicated a great deal of our blog to discussing it and trying to keep readers updated. Have a look at the FBAR & Form 8938 section of our blog for up-to-date deadlines and filing requirements. If you have any questions about your FBAR, or if you would like to learn about our expat tax services, please contact us.