The American Institute of CPAs (AICPA) has submitted comments to the U.S. Department of the Treasury, the Internal Revenue Service (IRS) and Financial Crimes Enforcement Network (FinCEN) regarding proposed changes to the filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
FinCEN’s proposal (RIN 1506-AB26) would revise its regulations implementing the Bank Secrecy Act, which requires taxpayers who maintain a relationship with a foreign financial agency to keep certain records and file reports. FinCEN’s existing regulations generally require any taxpayer who has a financial interest in, or signature authority over, foreign financial accounts with a total value exceeding $10,000 during the previous calendar year to file an FBAR report by June 30 of each year.
The proposed regulations would conform the FBAR due date filing deadlines to those set under the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, would update the available filing exemption for officers and employees with signature authority, but no financial interest in a foreign financial account, and would require filers with 25 or more accounts to begin reporting detailed information on each account on their annual FBAR filing.
The AICPA recommended in its October 18 letter that:
- Any taxpayer who submits a timely extension request for their calendar year federal income tax return should automatically receive a corresponding extension to October 15 to file their FBAR;
- FinCen make available on its website a simple-to-complete electronic extension request for use by taxpayers who do not request a filing extension of their federal income tax return;
- FinCEN coordinate with tax preparation software vendors to ensure that both tax professionals and individual taxpayers have ready access for electronic filing of FBAR extensions through their products;
- FinCEN’s final regulations include a provision to grant an automatic extension until June 15 to FBAR filers located overseas or who maintain their books and records overseas;
- FinCEN permit taxpayers with signature authority but no financial interest in accounts whose filing requirements have been deferred since 2011 to not be required to file the deferred FBARs provided they would have qualified for the expanded filing exemption proposed by FinCEN;
- FinCEN allow filers with 25 or more accounts to provide the information as an attachment to their FBAR return; and
- FinCEN continue to provide an exemption from filing an FBAR to officers and employees of certain federally-regulated entities for accounts over which they have signature authority but no financial interest.