This is the last year that the Report of Foreign Bank and Financial Accounts, or FBAR, will be due to the IRS on June 30 (for tax year 2015). When filing an FBAR for this calendar tax year, 2016, it will be due earlier than previous years – April 15, 2017. This is an important change in filing cycles for the IRS, and it is important to make note of the changes and to remain in compliance.
The FBAR is required for those US Taxpayers who have an interest in or signatory control over at least one foreign bank or investment account, and the aggregate amount of that account (or the sum total of all qualifying accounts) exceeded $10,000 at any point during the calendar year.
For US taxpayers who reside in Canada or Mexico, this would include all bank accounts, securities and investment accounts, mutual funds, as well as registered retirement or savings plans and even insurance policies that have a present cash value. Those who fail to disclose offshore bank and investment accounts, income or assets such as real property face significant exposure monetarily and criminally. The failure to disclose accounts through FBARs exposes the US taxpayer to $100,000 or 50% of the highest aggregate balance for each individual offense. The failure to come into compliance with FBAR reporting also exposes the US taxpayer to criminal tax evasion charges and jail time.
If you are a US taxpayer and you have any interest in offshore accounts or assets it is important to carefully review your status with the IRS and come into full compliance with FBAR reporting. We invite you to contact the experienced international tax attorneys at Allen Barron for help preparing and filing FBARs and for a free and substantive consultation at 866-631-3470.