U.S. persons with a financial interest or signature authority over a foreign financial account(s) for which the total of all foreign accounts is greater than $10,000 at any time during 2014 must file a Report of Foreign Bank and Financial Accounts (Form 114 - FBAR) by June 30, 2015. There are no extensions.
For FBAR purposes, a U.S. person includes U.S. citizens, residents and entities, including corporations, partnerships and limited liability companies. The reporting requirement applies even if the foreign accounts do not produce taxable income and even if no withdrawals are made during the year. The reporting requirements were established to make it tougher for taxpayers to try and hide assets and income offshore.
The form isn't filed with a taxpayer's regular tax return. It's a separate form with a separate due date. The form must be filed electronically with the Financial Crimes Enforcement Network, not the IRS. Failure to timely report could result in significant penalties. The IRS recently issued guidance indicating the non-willful failure to timely report could result in a penalty of up to $10,000 for each omission. If the failure is considered willful, a penalty of up to the greater of $100,000 or 50 percent of account balances could apply for each year of omission. Criminal penalties may also apply.
If you believe you have not complied in prior years, the IRS is currently offering an Offshore Voluntary Disclosure Program to help move taxpayers into compliance with a reduced penalty structure and avoidance of criminal prosecution.
If you think you or your business might be subject to the FBAR filing requirements, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 354 1040 or Sterling Heights 586 254 1040.
You're Invited! Annual Not-For-Profit Accounting Update
Thursday, September 26, 2019
Hosted at Detroit Historical Museum
Middle Market Manufacturing Outlook
Wednesday, October 23
Hosted at the Detriot Athletic Club
7:30 AM - 11:30 AM