Many of us have forgotten a deadline or two throughout our lifetime, but the dates we absolutely do not want to miss are the filing deadlines for the Internal Revenue Service (IRS). Mainly because the Financial Crimes unit of the Treasury Department and the Justice Department are on the hunt for people who have neglected to pay attention to tax rules and regulations.
An important date to remember is June 30 – the due date for FBAR or Form 114. “Unlike the April 15 tax return filing deadline that can be extended by 6 months, the FBAR deadline can’t. If you had foreign accounts in 2013 that in the aggregate topped $10,000 at any time during the year, you should file on time, right? The default answer is yes, clearly,” writes Robert W. Wood of the Forbes.
For those who do not know much about Form 114, here is a short summary: FBAR is an acronym for Foreign Bank Account Report, and it refers to TD F90-22.1 Report of Foreign Bank and Financial Accounts. In 2013, the form was renamed, and is now is known as FinCEN 114.
“Yet for many, there is no perfect answer. Indeed, for some taxpayers, the question is more about where they are going long term with their issues, how quickly they plan to act, and whether they have good and accurate information to file now. In fact, for someone just addressing foreign accounts and income for the first time, filing a first FBAR on time may be a mistake,” Wood writes.
Some important reasons to consider having a prospective payment plan in place are:
“Will you go Streamlined or OVDP? Which tax years will count? Will you do a quiet disclosure or just start filing prospectively? Do you have all your accounts now or only some? Do you have statements?” writes Wood.
It is important not to file your taxes in a hurry and then get into trouble later. Many taxpayers are concerned that when they file an FBAR they are confessing to an unlawful act. While you are admitting to being late, it would not be considered a serious crime. Taxpayers are considering filing “quiet disclosures” through amended returns of years past.
On September 30, 2013, FinCEN announced FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the modern FBAR form). According to the IRS, “FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website. The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Form 114. It also offers an option to ‘explain a late filing,’ or to select ‘Other’ to enter up to 750-characters within a text box where the filer can provide a further explanation of the late filing or indicate whether the filing is made in conjunction with an IRS compliance program.”
If you or someone you know owes back taxes to the IRS, contact the tax experts at U.S. Tax Shield today. Our tax resolution attorneys with help you clear your name with the IRS as well as educating you on current rules and regulations of IRS Form 114.