By Erin Stockwell, Senior Manager
There’s been a lot in the news in the past few years about foreign bank accounts and big lawsuits. Most of what you’ve heard has probably been in relation to Swiss banks. Why? The Swiss have had unbreakable banking privacy laws for centuries – until now.
You may ask, “How does this apply to me?” By breaking the Swiss banks, the U.S. showed it had enough teeth to force other countries’ banks to report their U.S. account holders. The “teeth” are laws known as FATCA, and they will become effective July 1, 2014. Under FATCA, about 77,000 banks worldwide have registered with the U.S. and will share information about U.S. account holders. If you have a foreign financial account that holds $50,000 or more, chances are good the IRS will learn about it. If you’ve not already been reporting your foreign accounts on the annual FBAR form, this could mean trouble for you.
The FBAR (formally known as FinCEN 114) is required for all U.S. persons who have more than $10,000 in foreign accounts at any time during the year. In addition to your own accounts, you must include accounts for which you have signature authority or which are owned by an entity you control. The penalties for not filing are steep. The due date for the 2013 form is June 30, 2014, and no extensions are available.
Previously you could file a paper form but this year it must be e-filed. Filing isn’t as simple as popping your form in the mail. If you must file, we recommend you e-file as early as possible. We can help you prepare and e-file. If you’ve never filed and think you might need to, we can help you navigate the requirements and create a plan if you’re out of compliance.
For more information contact, Erin Stockwell, Senior Manager, at 406.727.0888.