The IRS has some good news and some bad news for expatriates and taxpayers with foreign income. First, the bad news: The deadline for filing Form 114, the Report of Foreign Bank and Financial Accounts, is moving up a couple of months.
The good news is that the new deadline is easy to remember: April 15. Even better, the law introduces an extension for FBAR filers, setting the latest due date at Oct. 15 for a maximum 6-month extension.
In a way, the change offers a lesson in federal lawmaking. It was not a provision in one of those lengthy bills that make the Tax Code just a little more confusing for taxpayers. It was a small part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 that Pres. Barack Obama signed into law right before Congress’ August recess. (For trivia buffs: According to ThinkProgress.org, Senators and members of the House are the only people in the country required to take a vacation.)
A couple of important notes: The change will not be effective for the 2015 tax year. The deadline for 2015 filings remains June 30, 2016. An extension will not be available in 2016, just as it is not available for taxpayers who missed the June 30, 2015, deadline. Remember: Failure to file on time translates into at least a $10,000 penalty.
The change goes into effect for the 2016 tax year, making 2017 the first year with an April 15 deadline and the possibility of an extension. And, speaking of extensions, the law also allows the government to waive penalties for first-time filers who fail to request an extension.
This law does not affect the e-filing requirement.
Source: Accounting Today, “FBAR Deadline Moves Up 3 Months to April 15,” Shannon Smith Retzke and Aaron D. Schumacher, Aug. 14, 2015