Federal law requires U.S. citizens and resident aliens to report world-wide income, including income from foreign trusts, bank and securities accounts. In addition to attaching Schedule B to their tax returns disclosing foreign accounts, affected taxpayers need to file the FBAR (FinCEN Form 114) and may have to attach Form 8938, Statement of Foreign Financial Assets, to their tax returns. Form 114 is only available through the BSA E-Filing System website and must be filed electronically. FBAR reports for years prior to 2016 were due on June 30 of the following year with no extension possible. The revised deadline and automatic extension became effective for FBAR reports of 2016 accounts.
FATCA Registration and FBAR Filing
The Foreign Account Tax Compliance Act (FATCA) also requires reporting of certain foreign financial assets on Form 8938. However, the reporting thresholds and persons required to file are broader than the FBAR requirements. Individuals and domestic entities must check the requirements and relevant reporting thresholds of each form and determine whether they should file Form 8938, FinCEN Form 114, or both. Form 8938 and Instructions can be found at this link. FinCEN Form 114 and Instructions can be found through FinCEN’s BSA E-Filing System.
FATCA has had a huge impact on disclosure of US taxpayers’ accounts in foreign financial institutions, such disclosure being a burden generally on the financial institution. Although the FBAR filing was required in the 1970s, it was not widely utilized until the power of FATCA became recognized in the last few years (see our Client Alerts of March 18, 2010, February 28, 2011 and April 14, 2014).
FBAR filings have always been separate from FATCA filings, and the IRS has even provided a comparison chart to help taxpayers sort out the individual filing requirements, recently updated to reflect the new FBAR filing date.
New FBAR Filing Date
As noted above, the troublesome June 30 date was previously moved to a more familiar April 15 (or later general individual filing date), but the bottom line now is that FinCEN has granted any filers missing the April 18, 2017 date an automatic extension until October 16, 2017.