Let's Talk Taxes – Going Electronic With FBAR
“The numbers of Americans filing the Report of Foreign Bank and Financial Accounts, or FBAR, soared from 276,386 in 2009 to 618,134 in 2011.”(Asha Dixit, CPA, MBA, MS is a partner with Shah, Dixit & Associates P.C. in Burlington, MA. For further information, contact Ms. Dixit at firstname.lastname@example.org. )
Many Americans Abroad Surprised by Tax Code's Nasty Bite, New York Times May 10th, 2012
Effective July 1, 2013 the Report of Foreign Bank and Financial Accounts (FBAR) has to be filed electronically. This mandate should not come as a surprise since beginning September 2011 the Financial Crimes Enforcement Network (FinCEN) has issued notices and updates on proposed requirements for electronic filing. In February 2012, FinCEN issued a Final Notice mandating electronic filing.
The FBAR is a reporting requirement conceived under the Bank Secrecy Act (BSA) of 1970. Now this form has to be filed electronically through the BSA E-File System supported by the Financial Crimes Enforcement Network (FinCEN).
E-Filing provides a safe, secure, convenient way to file this form which in the recent past has gained notoriety due to the penalty regime associated with non-filing.
For 2013, R has determined that he has to file an FBAR to report his overseas bank accounts. His 2013 FBAR will have to be filed electronically.
The FBAR E-Filing mandate encompasses all filings after July 1, 2013 including delinquent filings, corrections and amendments. It is not the period of filing but the date of filing of the FBAR that determines whether it is subject to the electronic filing mandate.
G realizes after reading the FBAR filing requirements that she had filing obligations for 2011 calendar year, the due date for which was June 30, 2012. G was not aware of this FBAR filing requirement and, therefore, is in noncompliance. In August 2013, she decides to file her 2011 FBAR. G must file the 2011 FBAR electronically as it was filed after the electronic mandate came into effect.
Individuals and organizations must comply with this mandate as noncompliance with the FBAR E-Filing mandate could result in civil penalties by FinCEN.
Disclaimer: Every individual’s tax situation is different and tax situations change over time. This article is intended to give general information to enable the reader to discuss their situation with a tax adviser. It is not intended to be tax or legal advice and should not be construed as such.
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