United States citizens, residents and entities holding foreign accounts exceeding an aggregate of $10,000 at any time during the calendar year are required to file a FinCEN Form 114 (Report of Foreign Bank and Financial Accounts or “FBAR”). This electronically-filed Form has been traditionally due on June 30 of the following calendar year, but Congress recently changed this deadline in the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, which President Obama signed into law on July 31, 2015.
For FBARs due after December 31, 2015, the new law changes the filing deadline to April 15 of the subsequent calendar year, aligning it with the deadline for individual income tax returns (Forms 1040) as well as the new deadline for corporate income tax returns (Forms 1120). Future filers may also now request an automatic six month extension to file, similar to the procedure for income tax return extensions.
Non-filers may face substantial civil penalties for either willful or non-willful violations and may be subject to criminal prosecution. Although recent IRS guidance has signaled potential leniency in addressing future FBAR noncompliance, the possible sanctions are still serious. For these reasons, the updated filing date and procedures are a sensible development and welcome change for FBAR filers who desire an easier path to maintaining compliance.