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New Law Changes FBAR Filing Deadline

August 10, 2015

Beginning with the FBAR (FinCEN Report 114) for the 2016 year, the filing deadline for the FBAR will be April 15th with a six-month extension until October 15th available upon request.  The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, which was enacted on July 31, 2015, modified the FBAR filing deadline from June 30th to April 15th to align it with the filing deadline for individual income tax returns.  (Pub. Law 114-41)  Significantly, now FBAR filers can request a six-month extension until October 15th to file the report. 

Under the new law, the FBAR filing deadline for U.S. citizens and residents residing abroad will be automatically extended until June 15th, with an additional four-month extension available until October 15th.  The law does not provide another two-month extension until December 15th, which is currently available upon request to taxpayers residing abroad to file their income tax returns. 

The change is apparently meant to benefit taxpayers by aligning due dates and allowing for an extension; however, it does accelerate the unextended FBAR filing by several months.  The law also gives the IRS authority to waive penalties for taxpayers who are first-time FBAR filers who failed to timely request an extension to file.  To obtain the penalty relief, the taxpayers must file the FBAR by October 15th.

Taxpayers should understand that this change does not relieve them from reporting foreign accounts and/or assets on their tax return (e.g., on Schedule B, Forms 8938, 5471, 3520 or 3520-A).  It is also yet unclear whether the taxpayers will be able to request an extension to file an FBAR in conjunction with a request for an extension to file a tax return or if a separate FinCEN filing will be required.  And while the change will certainly apply to the 2016 FBAR filing due date, which will now be April 15, 2017, until further guidance is issued, the due date for the 2015 FBAR remains June 30, 2016.  Nor does the law change the requirement that the FBAR be electronically filed with FinCEN, separate and apart from the tax return.

In addition to modifying the FBAR filing deadline, the law also changes the filing deadlines for partnership, S Corporation, and C Corporation tax returns.  It also overturns the Supreme Court's decision in Home Concrete v. United States, 132 S.Ct. 1836 (2012), where the Court held that an overstatement of basis does not result in an omission of income which triggers the six-year statute of limitations on assessment.  The law amends Section 6501(e)(1)(B) to explicitly include an overstatement of basis in the definition of the omission from gross income.

Caplin & Drysdale has a full team of lawyers well-versed in all aspects of foreign asset reporting.  For further information, please contact a member of Caplin & Drysdale's Tax Controversies Group.

Zhanna A. Ziering
zziering@capdale.com
212.379.6075

 

T. Joshua Wu
jwu@capdale.com
202.862.5023

 

Charles M. Ruchelman
cruchelman@capdale.com
202.862.7834

 

Mark D. Allison
malison@capdale.com
212.379.6060 

Niles A. Elber
nelber@capdale.com
202.862.7827

 

Mark E. Matthews
mmatthews@capdale.com
202.862.5082

 

Scott D. Michel
smichel@capdale.com
202.862.5030

 

Matthew C. Hicks
mhicks@capdale.com
202.862.7852

________________________________________________

 

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of tax, tax controversy, and litigation legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills - combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment - make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:

-Bankruptcy
-Complex Litigation
-Corporate Law
-Corporate, Business & Transactional Tax
-Employee Benefits
-Exempt Organizations

-International Tax
-Political Law
-Private Client
-Tax Controversies
-Tax Litigation
-White Collar Defense

For more information, please visit us at www.caplindrysdale.com.

Washington, DC Office: 
One Thomas Circle, NW
Suite 1100
Washington, DC 20005
202.862.5000

       

New York, NY Office:
600 Lexington Avenue
21
st Floor 
New York, NY 10022
212.379.6000

 ___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.

© 2015 Caplin & Drysdale, Chartered
All Rights Reserved.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of tax, tax controversy, and litigation legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills - combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment - make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:

-Bankruptcy
-Business, Investment & Transactional Tax
-Complex Litigation
-Corporate Law
-Employee Benefits
-Exempt Organizations
-International Tax
-Political Law
-Private Client
-Tax Controversies
-Tax Litigation
-White Collar Defense

For more information, please visit us at www.caplindrysdale.com.

Washington, DC Office:
One Thomas Circle, NW
Suite 1100
Washington, DC 20005
202.862.5000
        New York, NY Office:
600 Lexington Avenue
21st Floor 
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.

© 2017 Caplin & Drysdale, Chartered
All Rights Reserved.