The Financial Crimes Enforcement Network (FinCEN) announced an automatic six-month extension for taxpayers required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Taxpayers who missed the April 17, 2017 deadline now have until October 16, 2017 to submit their FBARs for 2016 without being subject to penalties.
Any United States person with an interest in, or signature authority over, foreign financial accounts whose aggregate value exceeds $10,000 at any time during the year is required to file an FBAR with FinCEN in the following year.
- Foreign financial accounts include bank accounts, brokerage accounts, mutual funds and other pooled investment funds at foreign financial institutions, including many types of foreign retirement plans and life insurance policies.
- For FBAR purposes, a U.S. person can be treated as the owner of a foreign financial account owned by a corporation or a partnership if the U.S. person owns more than 50 percent of the voting stock of the corporation or more than 50 percent of the capital or profits interests in the partnership.
- The above rule also applies to a U.S. person owning more than 50 percent of the beneficial interest in the income or assets of a trust. However, beneficiaries of a trust are not required to file FBARs with respect to accounts held by the trust if the trustee files the necessary returns. If the grantor of a trust is treated as the owner of the trust’s income or assets for tax purposes under the “grantor trust” rules, the grantor is required to file FBARs for reportable accounts held by the trust.
- For FBAR purposes, U.S. persons include disregarded entities, such as single-member limited liability companies, that would not otherwise be considered “persons” for most tax purposes.
The IRS has provided a comparison chart to help taxpayers sort out the individual filing requirements, recently updated to reflect the new FBAR filing date.
For questions related to FBAR filings and other filing requirements, contact Asgard Worldwide.