The IRS and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced Tuesday that a small group of individuals required to file the Report of Foreign Bank and Financial Accounts (FBARs) will receive a one-year extension beyond the upcoming filing date of June 30, 2011.
FinCEN issued Notice 2011-1 that extends the deadline until June 30, 2012, for these individuals:
An employee or officer of an entity under 31 CFR § 1010.350(f)(2)(i)-(v) [e.g., many banks and financial institutions examined by government agencies, SEC registrants, etc.] who has signature or other authority over and no financial interest in a foreign financial account of a controlled person of the entity.
- An employee or officer of a controlled person of an entity under 31 CFR § 1010.350(f)(2)(i)-(v) who has signature or other authority over and no financial interest in a foreign financial account of the entity or another controlled person of the entity.
All other U.S. persons required to file an FBAR form this year are required to meet the original filing date.
This week’s extension was issued to facilitate more accurate FBAR filings in the wake of the recent finalization of regulations, the IRS said in a news release. The original FBAR filing requirements, authorized under the Bank Secrecy Act (BSA), have been in place since 1972.
On Feb. 24 of this year, FinCEN published a final rule that amended the BSA regarding FBARs.
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 FBAR Form TD F 90-22.1 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 filing of FBAR 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 the 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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