The IRS extended the June 30 filing deadline to Nov. 1 for some taxpayers who are required to file a Report of Foreign Bank and Financial Account, commonly referred to as FBAR reports, for calendar years 2009 and earlier. For calendar year 2010, the deadline remains June 30.
The AICPA had recommended a delay to the IRS in a May 31 letter because of the difficulty taxpayers and their tax preparers were having in collecting the information necessary to file accurate reports.
The IRS said in Notice 2011-54, which extended the deadline, that the IRS and the Department of the Treasury’s Financial Crimes Enforcement Network, or FinCEN, “recently have been informed” that it is difficult for some taxpayers to obtain the documentation they need to file by June 30.
The AICPA will continue to seek a hardship exception, according to Michelle Koroghlanian, AICPA technical manager for tax. She said it can be extremely difficult for individuals to collect the necessary data to file FBAR reports if they no longer work for the company or if the company is no longer in business.
The Bank Secrecy Act requires any United States person with a financial interest in, or signature authority over, any financial accounts in a foreign country to file an FBAR if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year. Those with a financial interest in the account are required to pay U.S. tax on income from the accounts.
In its May 31 letter, the AICPA requested that FinCEN eliminate or reduce the FBAR filing requirement for 2009 and prior years for persons with signature authority over, but no financial interest in, a foreign bank or financial account. The AICPA recommended that if a complete waiver could not be granted, FinCEN should:
- Limit the prior-year FBAR filings to 2008 and 2009.
- Conform the due date for the deferred FBARs to that of the 2011 Offshore Voluntary Disclosure Initiative, which is Aug. 31, 2011, providing these affected individuals a little more time to file the prior-year FBARs.
- Provide a hardship exception or waiver for those persons who had signatory authority in the prior year(s), but no longer have reasonable access to account data maintained by a former employer or similar circumstances.
For more information about FBAR filing requirements and the AICPA’s work on the issue go to the FBAR resource page on the AICPA website and read the June 16 Journal of Accountancy article.