June 30th was an important deadline for taxpayers with foreign financial holdings such as brokerage accounts, bank accounts, trusts, mutual funds or annuities. This was the date by which any Reports of Foreign Bank and Financial Records, known commonly as an FBAR, had to be submitted. This requirement is part of the Bank Secrecy Act. Any person living in the U.S. who has a financial interest or signatory authority over international accounts had to send Form TD F 90-22-1 to be received by the Department of the Treasury by the end of June.
When an individual files their taxes, the tax forms require them to indicate whether or not their finances are tied to such an interest overseas. Checking the box on your tax return is just half of the process. If you do earn the previously mentioned interest and have more than $10,000 in total assets, you must report this by sending in Form TD F 90-22-1. There are no extensions given. Any late reporting must have a document stating a valid reason for failure to report on time. If you have any questions about how to properly report this information, you should contact a tax professional as soon as possible.
Failure to submit an FBAR report carries heavy penalties, including imprisonment and fines up to approximately $10,000 per year. Willfully failing to file can carry penalties of $100,000 per year or 50% of the balance. Records of filing must be kept for 5 years under penalty of law. If you gain control of international accounts by obtaining Power of Attorney and the total sum of all international financial interests exceeds $10,000, you are obligated to inform the Department of the Treasury. Taxpayers dealing with situations such as these can benefit greatly by speaking with someone who is familiar with taxes and tax law.
If you send your FBAR report through a delivery service, keep in mind that it will need to be sent to an office of the IRS. If you were to send it via standard postal mail, it would be addressed to the Treasury Department. Review the information on Form 656B for more information on submitting your Reports of Foreign Bank and Financial Records. Our tax experts are available to answer any questions about the FBAR and other tax issues. Call today to get the answers you need!