FinCEN Changes FBAR Deadline Again AND AGAIN

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Republished with permission. This post was written by Helen Burggraf and originally appeared on October 16, 2020 on the American Expat Financial News Journal website.

Another Update October 19, 2020 – The Filing Deadline Is Now October 31, 2020

And back to the original post …

The U.S. Financial Crimes Enforcement Network has quietly removed from its website its surprise announcement, posted just two days ago, that the final deadline for Foreign Bank Account Report (FBAR) filings had been moved to Dec. 31, from Oct. 15 (yesterday).

Instead, it has clarified, elsewhere on its website, that the extended Dec. 31 FBAR filing deadline applied only to “victims of recent natural disasters”, such as “victims of the California wildfires, the Iowa Derecho, Hurricane Laura, the Oregon wildfires, and Hurricane Sally”.

The shock removal of the blanket two-and-a-half-month extension for FBARs to be filed, just hours after the announcement of it had been posted online, saw tax preparers and other followers of Foreign Bank Account Reports (FBARs) around the world emailing one another about it all through last night, and into the early hours of this morning.

In place of that announcement, which had been accessed at https://bsaefiling.fincen.treas.gov/Notice.html, and looked like this:

…visitors to that URL now see an Aug. 28, 2020 posting “Final reminder regarding SDTM New Server Transition”.

The announcement that “victims of recent natural disasters” have until Dec. 31 to file was published on Oct. 6, and may be viewed by clicking here.

FinCEN officials didn’t immediately reply to a request for comment.

Tax preparers and U.S. expat tax specialists, however, did.

“This is incredibly sloppy,” said Toronto-based citizenship lawyer John Richardson, who has written and commented extensively on FBARs over the years.

“I am not even sure that either the statute or the regulations provide the authority to change the deadline.

“In any case, those who relied on the original announcement of the extension are unlikely to be penalized for what could now be, for them, a late filing.”

Added David Treitel, founder of the London-based American Tax Returns Ltd firm: “Messing up the FBAR filing date puts a huge spotlight on what’s already broken at FinCEN. U.S. law is crystal clear. No FBAR can be extended any later than October 15th. That’s what the law says. Nothing else.

“FinCEN magically told the world on Oct. 14th that everyone had until Dec. 31st. They obviously forgot to ask Harry Potter. There is no magic spell in the law that ever allowed FinCEN to publish this.”

AKA ‘FinCEN Report 114s’

FBARs, which are also known as “FinCEN Report 114s”, must be filed every year by Americans who are resident in the U.S. or abroad, alongside their basic 1040 tax returns, if their offshore bank and financial account holdings total US$10,000 or more at any time during the U.S. tax year, which runs January to December.

Even if it’s only for a day. Even if the money is spread out across several accounts, none of which have had US$10,000 in them all year. Even if, on the day the FinCEN Report is filed, the account or accounts in question don’t have so much as a penny in them any more.

Although FBARs date back to 1970, when they were created as a result of the so-called Bank Secrecy Act, which was aimed at detecting and preventing money-laundering. Few expats were aware of their FBAR obligations, however, until sometime after 2010, when the Foreign Account Tax Compliance Act was signed into law, and began compelling non-U.S. banks and institutions to tell the IRS about any accounts they held on behalf of American citizens and Green Card holders.

To file an FBAR on the FinCEN website, click here.

Two IRS website pages that address FinCENs and which are worth checking out are here, and here.

To read some of the stories that the AXFNJ has run on the topic of FBARs recently, click here.

John Richardson – Follow me on Twitter @Expatriationlaw

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