FBAR Now Due Earlier but Extension Allowed
The FBAR due date has been accelerated from June 30 to April 15, starting with next year’s filings. The FBAR must be filed electronically on FinCEN Form 114 if the aggregate value of all of your foreign financial accounts exceeded $10,000 at any time during the prior calendar year. While you have less time to prepare and file your annual FBAR under these new rules, you can now get a six-month extension of time to make this annual filing, just like with your Form 1040.
The penalties for not filing an FBAR are quite harsh. If you are lucky enough to have your non-filing deemed non-willful by the IRS, you will be subject to a $10,000 penalty for each unreported foreign account for each year you fail to file. However, if your non-filing is deemed to be willful you are looking at a civil penalty equal to the greater of $100,000 or 50% of the value of the account at the time of the violation, for each year you failed to file, not to mention possible criminal penalties. Since the IRS can go back six years on non-filed FBARs, a penalty of this magnitude could easily wipe out your entire foreign account(s).
Fortunately, there are options available for curing delinquent FBAR filings and avoiding these exorbitant penalties. In fact, under certain circumstances and procedures you may be able to file your delinquent FBARs and avoid all penalties. If you have failed to file FBARs in the past, feel free to give me a call for a consultation with a Palm Beach County tax attorney regarding your options.