The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a revised notice Monday that clarified that a small subset of individuals are entitled to a one-year extension of the June 30, 2011, filing deadline to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). The notice was originally issued last week, and applied to certain financial professionals.
FinCEN said in a press release that the revision makes it clear that Notice 2011-1 also applies to officers and employees of a controlled person, as defined in the notice, when they have signature or other authority over (but no financial interest in) the foreign financial accounts of the controlled person. FinCEN said the notice was issued to facilitate more accurate compliance with new FBAR regulations, which were finalized on Feb. 24. The original FBAR filing requirements, authorized under the Bank Secrecy Act (BSA), have been in place since 1972.
FinCEN’s revised notice extends the deadline until June 30, 2012, for the following individuals:
An employee or officer of a regulated entity (as specified in the FBAR regulations) who has signature or other authority over and no financial interest in a foreign financial account of another entity more than 50% owned, directly or indirectly, by the regulated entity (a “controlled person”).
An employee or officer of a controlled person of a regulated entity (as specified in the FBAR regulations) who has signature or other authority over and no financial interest in a foreign financial account of the regulated entity, the controlled person, or another controlled person of the regulated entity.
All other U.S. persons required to file an FBAR this year are required to meet the June 30, 2011, filing deadline. FinCEN said that, unlike with federal income tax returns, extensions of time to file FBARs are generally not available.
The FBAR form is used to report a financial interest in, or signature or other authority over, one or more financial accounts in foreign countries.
U.S. persons are required to file an FBAR annually if they have a financial interest in or signature authority over financial accounts, including bank, securities or other types of financial accounts, in a foreign country, and the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.
In an action unrelated to the FinCEN notice discussed above, the AICPA submitted a comment letter dated May 31 requesting that FinCEN eliminate or reduce the FBAR filing requirement for 2009 and prior years for those with signature authority over, but no financial interest in, a foreign bank or financial account. It should be noted that FinCEN Notice 2011-1, issued on the same day as the AICPA comment letter, provides only limited deferral until June 30, 2012, to a select portion of signatories, and does not apply to all signatories that may potentially be required to file an FBAR by June 30, 2011, for 2009 or prior years. The AICPA has requested much broader guidance that would completely waive the FBAR filings for signatories for those prior years.
As alternatives to complete waiver, the AICPA made recommendations to:
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 (OVDI), 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 circumstance.
Visit the FBAR resources page on AICPA.org for more information.
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