The FBAR Filing Deadline is Fast Approaching!
Do you have a financial interest in or signing authority over a foreign account? If so, you may have to file an FBAR by the June 30th 2016 filing deadline. The Report of Foreign Bank and Financial Accounts, also known as the FBAR, must be filed if (1) you are a United States person with a financial interest in or signature authority over at least one foreign financial account and (2) the aggregate value of all foreign financial accounts exceeded $10,000 USD at any time during the calendar year.
So, first ask yourself, “Am I a U.S. person?” A U.S. person includes but is not limited to U.S. citizens, U.S. residents, certain visa holders, U.S. residents for tax purposes (You may be a U.S. resident for tax purposes if you satisfy the Substantial Presence Test.), corporations organized in the U.S., as well as trusts or estates organized under U.S. law. Next, determine whether you have a financial interest in or signature authority over a foreign financial account. Please be mindful that the definition of “foreign financial account” encompasses much more than just bank accounts. A foreign financial account includes but is not limited to bank accounts, brokerage accounts, mutual funds, passbook accounts, insurance or annuity accounts with cash values, and certain foreign retirement accounts. If you are a U.S. person with a financial interest in or signature authority over a foreign financial account and the aggregate value of all the foreign accounts exceeded $10,000 USD at any time during the taxable year, you are required to file the FBAR.
Failure to comply with FBAR reporting obligations may result in harsh, costly penalties that are entirely avoidable. Criminal penalties may apply when the failure to properly report a foreign account was willful. Our firm has experience in helping clients fulfill their FBAR reporting obligations and we also address delinquent FBAR filing issues.
As I always say to my clients: Compliance is key. Avoid the penalty!
If you have questions regarding the Report of Foreign Bank and Financial Accounts (FBAR), please contact:
Kristina Rampl, Esq., Tax LL.M. Boston • Cambridge Direct: 617/500-6652 • Fax: 617/217-0813