Any US person that has a financial interest in, or signature authority over, foreign financial accounts whose combined values exceeded $10,000 at any time during the 2014 year, generally must disclose such accounts by filing an FBAR (Report of Foreign Bank and Financial Accounts). This filing requirement is not part of your individual tax return and there is no extension of time to file.
There have been a couple of changes since the 2013 filings. The current FBAR form, FinCEN Report 114 supersedes the previous years’ form TD F 90-22.1 and it is now required to be filed electronically through the Bank Secrecy Act (BSA) e-filing system. FinCEN Notice 2014-1 also extended the due date for filing FBARs for certain individuals to June 30, 2016. This extension only applies to filers who have signature authority over, but no financial interest in the foreign account. So, if you have signature authority on accounts for your employer or a closely related entity, this could impact you personally.
Failure to comply with the reporting obligation can come with a huge cost. There are civil penalties up to $10,000 per violation for failing to properly file or complete the FBAR if the omission is not willful and with reasonable cause. For willful violations, penalties skyrocket to the greater of $100,000 or 50% of the balance in the account at the time of the violation and if considered criminal could result in jail time.
This area of law and reporting is extremely complicated. If you have questions about compliance or need assistance in navigating these requirements, please contact us.