Proposed Changes in FBAR Reporting: The Good, the Bad, and the Timing
Earlier this year, the Financial Crimes Enforcement Network (FinCEN) announced proposed amendments to the filing requirements for the Report of Foreign Bank and Financial Accounts (FBAR). To date, the amendments have not been approved. However, if/when they are approved be prepared to implement the changes quickly.
The Good: The proposal eliminates the current filing requirement for individuals with signature authority over foreign accounts, due to their employment, but no financial interests in those accounts. The burden shifts to the employer, who will be required to maintain a list of all officers and employees with signature authority over those accounts for five years. This list must be made available to FinCEN upon request.
The filing requirement is not eliminated for employees whose employers do not file an FBAR. For example, a U.S. person employed by a foreign entity may still have a filing requirement.
The Bad: The proposal removes a previous benefit and now requires filers with 25 or more foreign financial accounts to report all detailed account information on all foreign financial accounts for which they are required to file an FBAR.
The Timing: Regardless of the proposed signature authority changes, beginning with the 2016 tax year, the new enacted due date for FBAR reporting will be April 15, 2017, with an extension available to October 15, 2017.