Tax policy changes regularly. 2017 could prove to be one of the bigger years for adjustments considering a new Republican president is taking office, backed by GOP majorities in both chambers of Congress. What shape tax policy may take is impossible to forecast. One thing that is not likely to shift is the government’s focus on making sure taxpayers with funds in foreign bank accounts meet the tax obligations owed on that money.
As we noted in a previous post on this topic, any Minnesotan with a foreign bank account with a balance of $10,000 or more is required to file a Form 114 every year with the Treasury Department’s Financial Crimes Enforcement Network. Failure to do so can result in significant tax penalties from the IRS.
While that reporting requirement is not going away, the government is providing taxpayers who have to file the so-called Report of Foreign Bank and Financial Accounts, or FBAR, a bit of a grace period on the deadline. Indeed, officials have announced that every FBAR filer will receive a six-month extension. It will be granted automatically and be permanent going forward.
What that means is this. The current due date for filing FinCEN Form 114 is usually April 15. But because of the automatic, permanent extension, that date will now fall on Oct. 15. Because that date happens to fall on a Sunday this year, the actual due date for filing in 2017 will be Oct. 16.
Another key thing to note in connection with this filing is that it is required if you have $10,000 or more in a foreign account at any point during a given calendar year. If you don’t want to find yourself on the receiving end of a notice from the IRS, you will want to stay on top of your records to be sure you avoid possible trouble. In the event a dispute does arise, consult an experienced tax attorney.