Those who own or control financial or bank accounts that are in a foreign country have some reporting to do, and soon. They have to file an annual Report of Foreign Bank and Financial Accounts—also known as the FBAR—on or before April 15.

Taxpayers who miss the April deadline will get an automatic extension, pushing their FBAR filing deadline back to October 15. Since it’s automatic, there’s no need for filers to request the extension.

Filing the FBAR

The Bank Secrecy Act says U.S. persons—including U.S. citizens, resident aliens and any domestic legal entities—must file an FBAR if they have:

1. Financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account in a foreign country, and
2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

The Internal Revenue Service says this threshold means it’s a good idea for U.S. owners of any foreign accounts, even if those accounts are relatively small, to check and see if the filing requirement applies to them.

The IRS says “U.S. persons” covered by the filing requirements can be any citizen or resident of the United States, or a domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.

There’s only one way to file an FBAR and only one place to get it. The FBAR form is only available through the BSA E-filing system and must be filed electronically with the Financial Crimes Enforcement Network (FinCEN).

If taxpayers are unable to e-file their FBAR for some reason, they’ll have to call FinCEN at 800-949-2732 (or 703-905-3975 if calling from outside the U.S.) or they can email FinCEN at FRC@fincen.gov.

There are indeed penalties for those taxpayers who are required to file an FBAR but do not. In civil and criminal penalties can include fines and even prison time. However, the IRS won’t penalize anyone who properly reported a foreign account on a late-filed FBAR if the agency decides there was reasonable cause for the late filing.

For more information about the FBAR and filing deadlines, see the Financial Crimes Enforcement Network’s (FinCEN) website. FinCEN also has additional information about the FBAR extension.

The IRS also has other resources that can be helpful:

Source: IRS reminds holders of foreign bank and financial accounts of April FBAR deadline

– Story provided by TaxingSubjects.com