The tax professionals at Nardone Law Group, LLC want to remind taxpayers of the upcoming June 30, 2013 deadline to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, commonly known as the FBAR. If you are a United States person and you either had a financial interest in or signature authority over any foreign financial account(s) at any time in 2012 (for as little as one day), you must file the FBAR by June 30 if the aggregate value of the account(s) exceeds $10,000. This year, June 30 falls on a Sunday. As a result, if you paper file, you should plan ahead to ensure the FBAR is received by the Department of Treasury by Friday, June 28, 2013. If you have registered to e-file your FBAR, you may be able to timely file your FBAR through the BSA E-Filing System through Sunday, June 30, 2013.
FBAR Information and Requirements
The FBAR is not filed with your federal income tax return. Rather, the FBAR is due by June 30 following the calendar year you are reporting. It is important to note that there are no extensions granted for filing the FBAR. If you have requested an extension to file your federal income tax return, you must still file the FBAR by June 30. Further, the “mailbox” rule does not apply to FBARs as it does for other federal tax returns. Thus, the FBAR must reach the Department of Treasury on or before the deadline—which, again, falls on a Sunday—or you will be subject to penalties.
Filing FBAR Electronically Will Soon Be Mandatory
Effective July 1, 2013, the FBAR must be filed electronically. To register for e-filing, visit the BSA E-Filing System and follow the registration instructions. The IRS reports that the average burden associated with information collection for the FBAR is 20 minutes. Obviously the time required depends largely on the number of foreign accounts held by the US person, the values of those accounts, the type of accounts, and type of authority the taxpayer has over those accounts.
Form 1040 Reporting: Schedule B and Form 8938
In addition to filing the FBAR, a US person who holds a foreign financial account must also check the appropriate box on FBAR-related federal returns, such as Schedule B of the Form 1040 U.S. Individual Income Tax Return. If you have an interest in foreign financial assets, you may need to file Form 8938, which must be filed if your foreign assets have an aggregate value of $50,000 for individuals, and $75,000 if you are married filing jointly. The Form 8938, Statement of Specified Foreign Financial Assets is required to be attached to your annual income tax return and must be filed by the due date of that return. The Form 8938 is specific to foreign assets whereas the FBAR is specific to foreign financial accounts.
Have You Failed to File Past FBARs?
If you were required to file the FBAR in the past but have failed to do so, you may be eligible for the Offshore Voluntary Disclosure Program (OVDP). The OVDP is a way for taxpayers to come into voluntary compliance with US tax laws and forgo the risk of criminal prosecution for past noncompliance. Nardone Law Group can assist if you have questions about the OVDP.
Contact Nardone Law Group
If you are unsure as to whether or not you are required to file the FBAR or the Form 8938, you should contact an experienced tax lawyer today. The tax lawyers at Nardone Law Group have vast experience representing clients with international tax issues such as filing FBARs. Our experienced tax lawyers will thoroughly review your case to determine whether you are required to file the FBAR or the Form 8938, and will also assist in determining whether you should participate in the IRS’s Offshore Voluntary Disclosure Program, which allows non-compliant taxpayers to come forward and file past-due FBARs. Contact us today for a consultation to discuss your case.