Find Out if You Qualify for the New FBAR Filing Extension under Notice 2018-1
U.S. citizens and Green card holders living in Canada or otherwise outside the United States may have FBAR filing obligation. If the aggregate maximum value or the balance of your foreign financial accounts exceeds US $10,000 during the calendar year, you are generally required to file FinCEN Form 114: Report of Foreign Bank and Financial Accounts (FBAR). Note that if the above threshold is met in the aggregate, you are required to disclose all of your foreign financial accounts, even if they have zero value or balance. The general FBAR filing deadline for the 2018 tax year is April 15, 2019. However, there is an automatic extension until October 16, 2019. So, there is still time to file! FBARs are filed electronically with the U.S. Department of Treasury.
Yet, the FBAR filing deadline applies differently to certain U.S. persons with signature authority over one or more foreign financial accounts to the extent they have no financial interest in them (one is deemed to have a financial interest in the account if they have more than 50 percent interest in the entity that is the account holder). On December 4, 2018, the Financial Crimes Enforcement Network (FinCEN) released Notice 2018-1 further extending the previously deferred FBAR filing date for such U.S. persons.
Find Out if You Qualify for the New FBAR Filing Extension under Notice 2018-1!
Notice 2018-1 specifically refers to the FinCEN proposed regulations to the Bank Secrecy Act Regulations issued on March 10, 2016. The proposed regulations were designed to “expand and clarify the exemptions” applicable for the above-mentioned category of U.S. persons (with signatory authority over foreign financial accounts with no financial interest in them). In the past, FinCEN extended the FBAR filing deadline several times for this category of taxpayers because the proposed regulations have not been yet finalized (see FinCEN Notices 2011-1, 2011-2, 2012-1, 2012-2, 2013-1, 2014-1, 2015-1, 2016-1 and 2017-1). The proposed regulations are still under review.
This extension of the FBAR filing deadline defers the due date for disclosure of applicable foreign financial accounts to April 15, 2020. There is an automatic extension until October 15, 2020 without any affirmative action required to be taken by these taxpayers.
In view of the automatic extension, all other filers are effectively required to file their FBARs for the 2018 tax year by October 15, 2019. No affirmative action is required for the automatic extension to be granted. If you have not filed your 2018 tax year FBARs yet, don’t worry, you have until October 15, 2019 to file them.
Please file your FBAR accordingly, as the failure to do so timely, when required, may result in harsh civil and/or criminal penalties.
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