FinCEN proposes few important changes in FBAR reporting
FinCEN (Financial Crimes Enforcement Network) intends to make certain important amendments in FBAR reporting by eliminating reporting requirement individually by officers with signature authority due to their employment responsibilities, but with no financial interests in foreign financial accounts. FinCEN also proposes to require filers with 25 or more foreign financial accounts also to report, like other reporters, detailed account information on all foreign financial accounts for which they are required to file an FBAR.
In a Notice of Proposed Rulemaking (NPRM), FinCEN intends to revise and clarify certain provisions in the FBAR reporting rules regarding the filing of Reports of Foreign Bank and Financial Accounts (FBAR). The revisions would mainly apply to financial professionals who file FBARs due to their employment responsibilities.
The NPRM proposes to:
- Remove the provisions that limit the information reported with respect to situations when a filer has 25 or more foreign financial accounts, and instead require all U.S. persons obligated to file an FBAR to report detailed account information on all foreign financial accounts for which they are required to file an FBAR.
- Amend the FBAR regulation by eliminating the requirement for officers and employees of institutions to report on institutional accounts for which they have signature authority, but no financial interest, due solely to their employment, so long as their employer has an FBAR filing obligation. This exemption will be available only if such accounts are required to be reported under by the entity or any other entity within the same corporate or other business structure. This exemption would not be available to a U.S. person who is employed by a foreign entity and has signature authority over the foreign financial accounts of the foreign entity in which case the foreign entity/employer has no obligation to report its financial interest to FinCEN under the FBAR regulations.
- Require institutions to maintain a list of all officers and employees with signature authority over those same accounts; this list would be made available to FinCEN and law enforcement upon request.
FinCEN has previously issued temporary notices of exemptions concerning those filers covered by this NPRM, and those temporary exemptions remain unaffected.
The FBAR is a calendar year report ending December 31 of the reportable year which is due to be filed by June 30, 2016 for 2015 tax year. However, beginning with the 2016 tax year, as changed by recent legislation, the due date for FBAR reporting will be April 15 of the year following the December 31 report ending date.
FinCEN announcement link – https://www.fincen.gov/whatsnew/html/20160301.html