The Federal Highway Bill, which was signed into law on July 21, 2015, changes the due date of FBAR (Report of Foreign Bank and Financial Accounts). FinCEN Form 114, which was previously due on June 30, is now due on April 15th of each year. The new April 15 due date conincides with personal income tax return date, as well as the filing date for Form 8938. Form 8938 is the Statement of Specified Foreign Financial Assets, which many taxpayers confuse with the FBAR filing requirement.
FBAR Due Date and Filing Requirements
U.S. citizens, residents and business entities formed under U.S. law are required to disclose their holdings in foreign financial accounts on the FBAR if the value of these accounts exceeds $10,000 at any time during the previous year. Foreign financial accounts include bank accounts, mutual funds, and insurance policies with a cash value maintained by a foreign bank or other financial institution. Penalties for failure to file an FBAR can be steep. An unintentional violation can subject a taxpayer to a maximum $10,000 penalty, while a willful violation can subject a taxpayer to a penalty equal to the greater of $100,000 or 50% of the value of the account.
Why Congress Changed to FBAR Due Date
Congress believes that taxpayers will be more likely to file all required forms if they only have one filing date. The Highway Bill change the FBAR filing deadline from June 30 to April 15, and also permits taxpayers to request a six-month FBAR filing extension to match the extension available for individual returns. This change is effective for tax years beginning after December 31, 2015. Therefore, the 2016 FBAR, which reports foreign accounts held in 2016, will be the first to be due on April 15, 2017.