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The Internal Revenue Service (IRS) recently issued a reminder to U.S. citizens, resident aliens and domestic legal entities stating the extension deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) for calendar year 2020 is Oct. 15, 2021. This filing date is an extension from the original April 15 deadline, which taxpayers received automatically.
The Bank Secrecy Act (BSA) mandates U.S. individuals to file FBARs under the following circumstances:
Given these requirements, U.S. individuals or entities with foreign accounts, no matter the size, are recommended to see if they qualify for FBAR filing requirements to avoid possible penalties.
As a result of recent natural disasters (such as Hurricane Ida, California wildfires, Tennessee severe storms and flooding, Michigan severe storms, flooding and tornadoes, and Tropical Storm Fred) the Financial Crimes Enforcement Network (FinCEN) issued a notice stating impacted individuals in disaster areas qualify for an FBAR filing extension, which would push the deadline to Dec. 31, 2021. Our international tax practice, Moore Doeren Mayhew, shares more about the disaster relief here.
The 2020 FBAR must be filed electronically with FinCEN, not on a federal income tax return. It is only able to be accessed and submitted through the BSA E-Filing System. Anyone unable to e-file their FBAR within the U.S. must contact FinCEN at 800-949-2732 (or 703-905-3975 if they live outside the U.S.) for further instruction.
Anyone who fails to file their FBAR when required could fall victim to substantial civil and criminal penalties that could result in a fine and/or prison time. However, the IRS will not issue a penalty to those who correctly reported a foreign account on a late FBAR if it determines there was a reasonable cause for the delay.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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