Filing Extensions Also To Be Permitted
On July 31, President Obama signed a three-month highway funding extension bill called “The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (H.R. 3236, Pub.L. 114-41). Under the new legislation, the due date of FinCEN Form 114 (known as the “Foreign Bank Account Report” or “FBAR”) will be April 15 instead of June 30 and filers will be able to seek a six-month extension of the deadline. Similar to individual income tax returns, U.S. citizens and residents living abroad will receive an automatic extension of time to file the FBAR until June 15, with an additional four-month extension available to October 15.
Any U.S. person, whether an individual or an entity, with a financial interest in or signature authority over one or more foreign bank or financial accounts must file an FBAR when the aggregate value of the accounts exceeds US$10,000 at any time during the year.
The new legislation conforms the due date of the FBAR to the individual income tax return filing deadline, generally April 15, with a provision for an automatic extension until October 15. However, the new filing deadline applies to all types of filers, not only individuals. Under prior law, the FBAR filing deadline was June 30, and no extension was available.
This new foreign account reporting deadline applies to FBARs for taxable years beginning in 2016. As a result, for filers required to file a 2015 FBAR, the deadline will remain June 30, 2016. For filers required to file an FBAR for 2016 and thereafter, the deadline will be April 15 of 2017 and of each subsequent year.
The legislation also provides for penalty relief for first-time filers by giving the IRS authority to waive penalties for failure to timely request an extension.
The short-term highway funding bill did not include another proposal to revoke existing passports of U.S. citizens with $50,000 or more of unpaid taxes (inclusive of interest and penalties). However, it is still possible that this provision could be included in other legislation, possibly including a long-term highway funding bill that will likely be considered by Congress.
For further questions regarding the recent FBAR date change or other foreign account compliance inquiries, please contact us to speak with Luca Cantelli, Robert Ladislaw, William Blum or one of our other international tax attorneys.
Please be advised that this blog post is for informational purposes only, and does not constitute legal advice.