FBAR Filings Top One MillionNews
Posted in on July 26, 2016
U.S. persons who have an interest in certain foreign accounts are required to submit an annual Report of Foreign Bank and Financial Accounts (FBAR). Certain U.S. taxpayers are also subject to reporting requirements under the Foreign Account Tax Compliance Act (FATCA).
Last year, a record number of FBARs and FATCA reports were filed. More FBARs and FATCA reports are being submitted in part because the IRS has been aggressively cracking down on anyone who doesn't let the IRS know about all offshore investments.
If you are not sure if you are required to submit FBARs or comply with FATCA requirements, you need to talk with a Maryland tax attorney. If you were supposed to submit these reports in prior years and failed to do so, you could be subject to harsh penalties.
An attorney can help you to determine if you can enter into voluntary disclosure programs or file amended returns which limit the financial and legal consequences of failure to file.
FBAR Filings Have Reached a New High
Recent reports show that in 2015, the number of FBARs filed reached 1,163,229. This is the highest number ever filed and is up more than eight percent as compared with filings in 2014. FBAR filings have grown an average of 17 percent over the past five years, so the increase in filings comes as no surprise.
Forms required by FATCA also reached 300,000 this year. FATCA mandates that certain U.S. taxpayers file federal form 8938, Statement of Foreign Financial Assets. The 300,000 form 8938 filings over the course of 2015 was similar in number to the prior year. However, it represents close to a 50 percent increase in the number of filings as compared with tax year 2011, which was the first year that the form was required.
FATCA was signed into law in 2010 and included the Form 8938 filing requirements when the legislation was passed. The goal was to encourage tax compliance by U.S. taxpayers who had accounts offshore.
U.S. taxpayers are subject to FATCA and have to submit a form 8938 with their tax return if they have offshore accounts with assets of $50,000 or more at the end of the tax year or if their offshore accounts had a total value of $75,000 or more at any point over the course of the year. For individuals who are married filing jointly, reporting is required if the accounts offshore are valued at $100,000 on the last day of the tax year or if they exceed $150,000 at any point in time over the tax year.
FATCA reporting requirements are separate from FBAR requirements. FBAR requirements are filed separately from tax returns and have to be filed by any U.S. person who has an interest in or any type of authority over foreign accounts if the aggregate value of the accounts exceeds $10,000 at any time in a calendar year. This includes individuals with signature authority.
Many U.S. taxpayers have found themselves facing penalties, often exceeding the value of accounts, for failure to submit required forms declaring offshore accounts.
As there has been more publicity about penalties and consequences of not filing, compliance with FBAR and FATCA reporting requirements has increased, culminating in the record number of filings last year. Anyone who is concerned about their own duties to file forms, or has not filed required forms in the past, should contact attorney Kevin Thorn for help as soon as possible.Share This Post