FBAR Deadline 2019 – When is the Last Day to Report your Accounts?
FBAR Deadline 2019: When is the Last Day to Report your Accounts? The FBAR Deadline 2019 is on automatic extension. In other words, the deadline to file the 2018 FBAR (in 2019) is the same day your tax returns are due, including extension. In addition, Taxpayers do not need to file any specific extension with the IRS or FinCEN (currently, subject to change) to request an extension — in other words, it is on FBAR Automatic Extension.
FBAR Deadline 2019
If you are the owner of foreign financial accounts, and you meet the threshold requirements for having to report the balances of these foreign accounts to the U.S. Government, you may have to file an FBAR. Therefore, it is important to know the deadline to file an FBAR.
Common Questions about the FBAR Filing Deadline:
- Is the FBAR part of my tax return?
- What if I did not file the FBAR previously?
- Are there penalties for not filing the FBAR?
- Can I just file past FBARs?
- What are the IRS Amnesty/Voluntary Disclosure Programs?
The FBAR is not the most difficult of international tax forms. It does not require accounting or bookkeeping skills. Essentially, you have to locate the accounts’ maximum balance – which can be difficult.
You have until October to File the FBAR
Depending on the type of account(s) you have, and whether the foreign financial institution provides the data may impact the time it takes you to complete the task.
But, the two main issues involving the FBARs deal with the penalties for non-filing — which can be tough.
The FBAR form is filed annually by any individual, entity, trust, etc. who has ownership, co-ownership or signature authority over foreign bank accounts and foreign financial accounts, which have an aggregate balance of more than $10,000 (USD) on any day of the year.
The deadline for filing the FBAR is the same as your tax return, April. Therefore, your 2018 FBAR is due by April 2019. And, if you applied for an extension, then the FBAR coincides with the filing date of the Tax Return.
The memorandum can be found here.
Is the FBAR Part of my Tax Return?
The FBAR is not part of your tax return. Rather, it is a separate form you can download from the FinCEN website. (In years past, it was submitted on paper with your tax returns; now it is submitted electronically through the FinCEN website.
What if I Did Not File the FBAR Previously?
If you did not file the FBAR previously, then you are out of compliance.
Penalties for Not Filing the FBAR?
Yes. Unfortunately, the penalties can be severe (but not always)
FBAR Penalty Structure
Not all FBAR Penalties are the same. Sometimes, the IRS penalties for unfiled or late FBARs are bad, and sometimes, well…they’re not so bad. You may even receive a Warning Letter in Lieu of Penalty. It jut depends on the different facts and circumstances of your situation
FBAR Penalties can be Civil or Criminal. They can then be broken down further, but the threshold question, is whether the IRS will get you for Civil (money) or Criminal (money, and worse).
FBAR Civil Penalties
Civil FBAR Penalties are limited to monetary penalties. A civil FBAR Penalty is a penalty that is focused on monetary fines or warning letters (waivers) — without any risk of criminal investigation or prosecution.
|U.S. Code citation||Civil Monetary Penalty Description||Current Maximum|
|31 U.S.C. 5321(a)(5)(B)(i)||Foreign Financial Agency Transaction – Non-Willful Violation of Transaction||$12,921|
|31 U.S.C. 5321(a)(5)(C)||Foreign Financial Agency Transaction – Willful Violation of Transaction||Greater of $129,210, or 50% of the amount per 31 U.S.C.5321(a)(5)(D)|
|31 U.S.C. 5321(a)(6)(A)||Negligent Violation by Financial Institution or Non-Financial Trade or Business||$1,118|
|31 U.S.C. 5321(a)(6)(B)||Pattern of Negligent Activity by Financial Institution or Non-Financial Trade or Business||$86,976|
Penalties for Civil FBAR can be Broken down into two (2) categories:
- Willful FBAR Penalties
- Non-Willful FBAR Penalties
Non-Willful FBAR Penalties
These FBAR Penalties are typically the least severe penalties. An FBAR non-willful penalty is a “lower-level” penalty for not filing the FBAR. The non-willful penalties can be high, BUT, typically they are not as high as willful penalties.
Willful FBAR Penalties and (Reduced) Willfulness
The Willful FBAR Penalty is typically more severe. An FBAR Willful Penalty is penalty for acting willful, willfully blind, or with reckless disregard in not filing the FBAR. We have provided detailed explanations and analyses in our free International Tax Law library about these different terms, and what they mean.
FBAR Criminal Penalties
Criminal FBAR Penalties may include monetary penalties and incarceration. This is when the IRS refers the matter to the Department of Justice (DOJ) or other 3 letter government faction for criminal investigation and possible prosecution. These are not very common, but unfortunately they are on the rise.
|U.S. Code citation||Criminal Violation & Description||Criminal Penalty|
|31 C.F.R. §103.59(b)||Willful – Failure to File FBAR or retain records of account||Up to $250,000 or 5 years or both|
|31 C.F.R. §103.59(c)||Willful – Failure to File FBAR or retain records of account while violating certain other laws||Up to $500,000 or 10 years or both|
|31 C.F.R. §103.59(c)||Knowingly and Willfully Filing False FBAR||$10,000 or 5 years or both|
|Civil and Criminal Penalties may be imposed together. 31 U.S.C. § 5321(d).||See Statutes||See Statutes|
A few important considerations:
- Most courts have held that the maximum annual FBAR willful penalty is not limited to $100,000.
- If the court believes you acted with Reckless Disregard, they can still penalize you full Willful FBAR Penalties.
- If the court believes you acted with Willful Blindness, they can still penalize you full Willful FBAR Penalties.
- Even in a non-willful setting, the court can issue $10,000 per account, per year penalty
What Happens if you File the FBAR Late?
No. If you just go back and file past FBARs without submitting to one of the approved Voluntary Disclosure/Amnesty Programs, you may be subject to the penalties listed above, along with other violations if you are willful — such as Tax Fraud and/or Tax Evasion.
What are the IRS Amnesty Programs for Filing Past FBAR?
If you are out of compliance, the penalties can be severe. Therefore, you may consider entering IRS offshore voluntary disclosure/tax amnesty, before it is too late.
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