US foreign bank and financial accounts filing deadline looming
The taxman in the United States is reminding people with one or more bank or financial accounts outside the country that they need to file their Foreign Bank and Financial Accounts by the end of June.
The Internal Revenue Service said FBAR’s must be completed by Tuesday 30 June and can be done electronically online with the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the Treasury Department.
‘It is not a tax form and cannot be filed with the IRS. The form must be filed electronically and is only available online through the BSA E-Filing System website,’ and IRS spokesman confirmed.
In general, the filing requirement applies to anyone who had an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2014.
Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them. FBAR filings have surged in recent years, topping the one million mark for the first time during 2014.
Meanwhile, streamlined filing compliance procedures are now available to taxpayers who mistakenly failed to report foreign financial assets and pay all tax due in respect of those assets that was not due to wilful conduct on their part.
The streamlined procedures are designed to provide to taxpayers in such situations with a streamlined procedure for fling amended or delinquent returns, terms for resolving their tax and terms for resolving their tax and penalty obligations.
Taxpayers using either the Streamlined Foreign Offshore Procedures or the Streamlined Domestic Offshore Procedures, will be required to certify that the failure to report all income, pay all tax and submit all required information returns, including FBARs, was due to non-wilful conduct.
Taxpayers who want to participate in the streamlined procedures need a valid Taxpayer Identification Number, a spokesman confirmed and added that tax returns submitted under either the Streamlined Foreign Offshore Procedures or the Streamlined Domestic Offshore Procedures will be processed like any other return submitted to the IRS.
He also pointed out that returns submitted under the streamlined procedures may be subject to IRS examination, additional civil penalties, and even criminal liability, if appropriate.
‘Taxpayers who are concerned that their failure to report income, pay tax, and submit required information returns was due to wilful conduct and who therefore seek assurances that they will not be subject to criminal liability and/or substantial monetary penalties should consider participating in the Offshore Voluntary Disclosure Program and should consult with their tax professional or legal advisers,’ the spokesman explained.
