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FBAR Filing: FinCEN’s Third Extension for Certain Signatory Authority Filers

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In FinCEN Notice 2012-2, the Financial Crimes Enforcement Network (FinCEN) announced a third extension of time for certain Report of Foreign Bank and Financial Accounts (FBAR) filings in light of ongoing consideration of questions regarding the filing requirement and its application to individuals with signature authority over but no financial interest in certain types of accounts. The new extended deadline is set for June 30, 2014.

This extended filing deadline applies only to the following classes of individuals:

1). An employee or officer of a covered entity (see 31 C.F.R. § 1010.350(f)(2)(i)-(v)) who has signature or other authority over and no financial interest in a foreign financial account of another entity more than 50 percent owned, directly or indirectly, by the entity (a “controlled person”). For this purpose, a “controlled person” is a U.S. or foreign entity that is more than 50% owned (directly or indirectly) by an excepted entity.
2). An employee or officer of a controlled person of a covered entity (see 31 C.F.R. § 1010.350(f)(2)(i)-(v)) who has signature or other authority over and no financial interest in a foreign financial account of the entity or another controlled person of the entity.
3). An employee or officer of an investment advisor registered with the Securities and Exchange Commission who has signature or other authority over and no financial interest in a foreign financial account of persons that are not investment companies registered under the Investment Company Act of 1940.

Notice that categories 1 and 2 do not apply to companies that are not publicly traded or not SEC-registrants.

This extension comes after a series of earlier extensions by FinCEN. On February 14, 2012, FinCEN issued Notice 2012-1 to extend the filing date for FinCEN Form 114 Formerly TD F 90-22.1, FBAR, for certain individuals with signature authority over but no financial interest in one or more foreign financial accounts to June 30, 2013. This Notice was preceded by two earlier extensions: on May 31, 2011, FinCEN issued Notice 2011-1 (revised on June 2, 2011) to extend to June 30, 2012, the due date for filing the FBAR for certain individuals with signature authority over but no financial interest in one or more foreign financial accounts, specifically individuals whose FBAR filing requirements may be affected by the signature authority filing exceptions in 31 CFR § 1010.350(f)(2)(i)-(v). On June 17, 2011, FinCEN issued Notice 2011-2 similarly extending the FBAR filing due date to June 30, 2012, for certain employees or officers of investment advisers registered with the Securities and Exchange Commission who have signature authority over but no financial interest in certain foreign financial accounts.

The extension contained in FinCEN Notice 2012-2 is the third filing extension for individuals with signature authority over but no financial interest in certain types of accounts. It covers not only the reporting of signature authority held by such persons for 2012, but also for all other years for which filing was previously extended to June 30, 2012, under FinCEN Notices 2011-1 and 2011-2.

It is important to note, however, that all other taxpayers who are required to file an FBAR must still do so by June 30, 2013.

Gold Bullion Foreign Accounts and FBAR

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A frequent question in my practice is whether a foreign account holding gold bullion is required to be reported on FinCEN Form 114 formerly Form TD F 90-22.1, usually referred to as “FBAR” (Report on Foreign Bank and Financial Accounts).

FBAR is required to be filed by any U.S. person who has a financial interest in or signature authority or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year. FBAR is due April 15th or October 15th (for the previous calendar year). There is an automatic extension if the FBAR is not filed by the April 15th deadline, unlike Federal and some State returns that must be filed by extension. For federal returns the extension is Form 4868. The FBAR rules are enforced by the Internal Revenue Service.  You can read more about the general FBAR requirements here.

Whether gold buillion is required to be reported on the FBAR involves a general issue of whether FBAR definition of “financial account” covers foreign accounts that hold only non-monetary assets.  The answer is yes – an account with a financial institution that is located in a foreign country is a financial account for FBAR purposes whether the account holds cash or non-monetary assets.

Therefore, most taxpayers must reports foreign accounts that hold gold bullion on the FBAR.

Contact Sherayzen Law Office For FBAR Help

If you have any questions with respect to FBARs or you just found out that you should have filed the FBARs for the past years and you wish to go through a voluntary disclosure, contact Sherayzen Law Office as soon as possible.  Our experienced international tax firm can help you deal with any FBAR-related issues.

Remember, it does not matter whether you are located in another state or outside of the United States – we can help!