Foreign Bank and Financial Accounts Reporting: Did You Miss the New Deadline?

FBARThe new April 18, 2017, deadline for filing Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts, has come and gone. Certain individuals and businesses are required to annually file this form with FinCEN, which is a bureau of the Department of the Treasury.  If you missed the due date, we will explain what you need to do later in this article.  But first, we will discuss who is required to file, when and how to file, and what you need to know about recent IRS-issued guidance,  “Report of Foreign Bank and Financial Accounts (FBAR).”

Who Must File the FBAR?

In general, taxpayers must file the FBAR upon meeting both of the following conditions:

  1. The taxpayer is a United States citizen, corporation, partnership, tax-exempt organization, or trust (formed under the laws of the United States) that has a financial interest in, or signature authority over, a financial account located in another country.
  2. The aggregate value of financial account(s) located in another country exceeds $10,000 at any point in the calendar year.

For those meeting both conditions, there is a requirement to file an FBAR even if the account generates no taxable income.  A single foreign account can potentially create multiple filing requirements.  For example, a corporation with a foreign bank account must file an FBAR under the corporation’s name, and the individual officer who has signature authority over the account must also file an FBAR for the account under his or her name.

Additionally, the filing requirements are to be tested each year.  In other words, taxpayers may have met both conditions above in one year (and must file), yet in the next year may not have a filing obligation if one or both conditions are not met.

Several exceptions to the reporting requirements include:

  • Foreign financial accounts owned by a governmental entity
  • Owners and beneficiaries of U.S. individual retirement accounts
  • Participants and beneficiaries of tax-qualified retirement plans, such as a 401(k)
  • Certain financial professionals who have signature authority over a foreign account, but no financial interest in the account

The above list is not all-inclusive and a taxpayer should consult a tax advisor to discuss his or her unique situation.

When Is the FBAR Filed?

The FBAR is a calendar year form regardless of the fiscal year of the taxpayer.  As such, the filing must be remitted electronically by April 15 each year, adjusted for weekends and holidays.  The 2016 FBAR was due April 18, 2017.  This is a new due date as, in previous years, the return was due June 30.  However, unlike previous years, there is an automatic six-month extension available.  This is great news for any filers that missed the new April 18 deadline!  The other good news is that the extension is automatic–no extension form needs to be filed with the FBAR.  For those that did not file as of April 18, 2017, the extended due date is October 16, 2017.

How Is the FBAR Filed?

The FBAR is not filed with your tax return;  it is filed directly with FinCEN using Form 114.  For 2012 and all subsequent years, the FBAR must be filed electronically–no paper copies are accepted.  The taxpayer may file his or her own return or use the services of a certified public accountant  to file the return on the taxpayer’s behalf.

FinCEN has expressed its intention not to cause undue burden to taxpayers and, as such, is allowing the automatic extension.  It also allows a taxpayer to file the return late for reasonable cause and to document the reason for the late filing to avoid penalties.  Even with this leniency, if a taxpayer files late or not at all with no reasonable cause, the penalties are quite onerous. The Internal Revenue Service has the authority to assess a civil penalty of $12,459 per violation for non-willful violations of the filing requirement. Willful violations are subject to a penalty which is the greater of $124,588 or 50% of the balance in the foreign financial account generating the violation. The liability for the penalty may be that of the business or the individual with the financial interest or signature authority over the foreign account. Therefore, individual officers of corporations may be surprised to find themselves facing very strict penalties for not filing an FBAR in their own names.

If You Missed the Filing Date, Do Not Fear

If you missed the original filing date, the extended filing date, or perhaps were unaware of your filing requirement altogether, there is no reason to panic.  In certain circumstances, a taxpayer who seeks to be in compliance with FinCEN and the FBAR reporting requirement will be allowed to “catch up” on filings to become compliant again.

As a certified public accounting firm, PYA not only guides individuals and organizations through filing requirements but also provides continued assistance with adherence to FBAR deadlines, missed filings, and requests for penalty waivers.

If you have any questions about FBAR filing requirements, or would like to request a speaker on this topic for your organization or event, contact one of our executives below at (800) 270-9629.

Emily Smithson

Emily Smithson


Debbie Ernsberger

Debbie Ernsberger


Related Posts
Several PYA employees were acknowledged for their achievements in mid-year promotions.   PYA, a professional services firm, has announced that Matt Neilson is the latest principal to join its executive team.  In addition,...
Read More

PYA Announces Several Mid-Year Promotions

Certain employees of governmental and not-for-profit organizations may qualify for a program that offers student loan forgiveness with zero tax liability.   The Public Service Loan Forgiveness (PSLF) Program gives full-time...
Read More

Tax-Free Student Loan Forgiveness for Eligible Public Servants

PYA, a national professional services firm headquartered in Knoxville, has been awarded a 2018 Top Workplaces honor by the Knoxville News Sentinel. The award is a result of employee feedback...
Read More

Knoxville News Sentinel Names PYA a Winner of the Greater Knoxville Area 2018 Top Workplaces Award

The new Tax Cuts and Jobs Act (TCJA) can be confusing for many-- especially small business owners.  Although many aspects of the TCJA have been discussed, one component of the...
Read More

Government Clamps Down on “Deductible Fun” for Businesses

As businesses consider the impact of the Tax Cuts and Jobs Act (TCJA) introduced late last year, the corporate tax rate is receiving substantial attention.  However, according to a 2014...
Read More

2018 Tax Reform – The Excess Loss Limitation Likely to Squeeze Owners of Cyclical Businesses

A recent Accounting Standards Update (ASU) addresses land easements and their accounting under the new lease standards.  In January 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-01 Leases:...
Read More

Land Easements—Guidance for Implementing New Lease Accounting Standards

According to its tagline, Atlanta Business RadioX spotlights “the city’s best businesses and the people who lead them.”   PYA is pleased to share that one of its own, Consulting Principal...
Read More

PYA’s Lori Foley Shared Insight in Live Radio Interview

Many Americans have a 401(k) retirement savings plan as a benefit of employment with their employers.  They contribute a percentage of their compensation to their 401(k) each pay period with...
Read More

Taking Distributions from Your 401(k): What You Need to Know

The recent Tax Cuts and Jobs Act (TCJA) imposes a limit on deductions for business interest for taxable years beginning in 2018.  The limit, like other aspects of the law,...
Read More

IRS Sheds Light on New Limit on Business Interest Expense Deductions

Share This Insight

If you received value from this article, please share it with your network (e.g., Facebook, Twitter, LinkedIn). Icons below for your convenience.

Stay Current

* indicates required
Monthly eNewsletters
See more newsletter and alert options.

PYA Population Health Ascend

PYA Healthcare Blog

PYA Thought Leadership Services

The Healthcare Loop