Home / Articles / Avoid an International Incident

Avoid an International Incident

June 20, 2016

Share:

Reporting Foreign Bank Accounts and Other Financial Assets

In an effort to increase tax revenue and try to mitigate off-shore tax evasion, the IRS has ramped up the reporting requirements for foreign bank accounts and other financial assets held by both businesses and individuals. However, this endeavor creates yet another layer of tax compliance.

If taxpayers are not vigilant about their reporting obligations for the various international informational returns, they may face unfortunate consequences. The civil penalties for not filing either the Report of Foreign Bank and Financial Accounts (FinCEN Report 114, frequently referred to as the FBAR form) or the Foreign Financial Asset Reporting Form (Form 8938) are significant and harsh. In extreme cases, taxpayers may also risk criminal charges.

Know what you’re accountable for

First, it is important to review your international bank accounts and other financial assets to understand exactly what you have, and are responsible for. Second, make sure you understand the reporting requirements with respect to those assets. There are various dollar amount thresholds for filing the different forms, based on what type of foreign account you have as well as your filing status.

In addition, if you are a corporate officer with signature authority over a foreign bank account, you may also have an FBAR reporting requirement, even though you do not have direct control or ownership of the asset.

Filing due dates

Currently for the 2015 tax year, the FBAR is due by June 30, 2016. The Department of the Treasury must receive your FBAR by this date. Form 8938 is required to be filed with your annual return and must be filed by the due date (including extensions) for that return.

Beginning with the 2016 tax year (to be filed in 2017) the due date has changed.  The new due date will be April 15, or October 15 if an extension is requested.

How we can help

The international tax team at Clark Schaefer Hackett can help businesses and individuals understand the filing requirements and prepare the necessary disclosure forms. If you discover that you should have been filing either the FBAR form or Form 8938 for prior years, our international tax experts can consult with you on how to remedy the situation.

Contact us to learn more about reporting foreign bank accounts and other financial asset accounts, and to discuss your specific case. We have dedicated professionals in place to help you stay compliant.

 

 

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

Related Articles

Article

2 Min Read

Standard business mileage rate will increase for the second half of 2022

Article

2 Min Read

Proposed regulations for inherited IRAs bring unwelcome surprises

Article

2 Min Read

Get your piece of the depreciation pie now with a cost segregation study

Article

2 Min Read

Dodge the tumult with a buy-sell agreement

Article

2 Min Read

Tighten up billing and collections to mitigate economic uncertainties

Article

2 Min Read

No parking: Unused compensation reductions can’t go to health FSA

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.
  • Hidden
  • This field is for validation purposes and should be left unchanged.