Mandatory E-Filing for FBAR
Beginning July 1, 2013, all foreign bank account reporting (FBAR) forms must be filed electronically.
The IRS website cites an announcement from FinCEN (Financial Crimes Enforcement Network) dating back to June 29, 2011, which states that all FinCEN forms must be filed electronically with certain exceptions. The FBAR was granted a general exemption from mandatory electronic filing through June 30, 2013. The exemption has expired and beginning July 1, 2013 anyone required to submit Form 90-22.1 must file it electronically.
Prior to July 1, 2013, US expats filed by mail and the form had to be received at the Treasury Department by June 30, without any possibility of an extension. E-filing is more efficient than utilizing overseas mail, which will help more US expats meet this deadline. Filing late FBAR forms can result in stiff penalties, so on-time filing is critical.
Switzerland Ready to Cooperate with US to Uncover Tax Cheats
A long-running dispute between the US government and Switzerland appears to be coming to an end. The dispute centered on Switzerland’s airtight client secrecy laws, which has allowed US citizens to hide assets in Swiss banks and evade US taxes. US authorities had been growing increasingly impatient with Switzerland’s lack of cooperation in helping them identify tax evaders and began ramping up the efforts to acquire the information they were seeking.
The new Swiss law will not require banks to cooperate, but instead it gives the individual banks the right to decide if they want to negotiate with US authorities to settle disputes over suspected tax evaders. For now the US investigation is focused on thirteen Swiss banks suspected of helping American citizens cheat the IRS. These banks face fines and possible criminal prosecution of employees who were involved.
Switzerland’s Finance Minister Eveline Widmer-Schlumpf commented that even under the new law, the existing legal structure must be followed. The US will need to approach the banks and formally request documentation regarding those Americans suspected of evading their tax obligations. She also commented that there will be a distinction between what banks did prior to 2009, when the United States went after UBS AG, Switzerland’s biggest bank, and those that continued helping tax evaders afterwards. UBS entered a landmark deferred prosecution agreement with U.S. authorities in 2009, agreeing to pay $780 million in fines, penalties, interest and restitution.
“It will be a certain number of banks that engaged in these practices after 2009 that, let’s say this honestly, they shouldn’t have done,” she said.
This deal was agreed to in the Swiss Cabinet and will now go to lawmakers in parliament for approval later this year.