Major Change to FBAR This Year – It's Electronic
FBAR has become a great revenue source for the US Govt. in the last few years. Although there is no tax revenue that is generated directly from the FBAR filings FBAR does bring much-needed transparency and makes it very hard for people to hide income/assets in foreign countries.
This year the US Govt is becoming more serious about FBAR and making its grip even stronger by asking all filers to use the new electronic system. This new system will make the analysis of the FBAR filings much easier and much faster. The Department of Treasury will be able to identify the red flags and take swift actions. I have a feeling that the system might be already tied up with the IRS and may find unreported foreign income and can also flag individuals who might have not filed the FBAR in previous years.
Will you file FBAR this year?
If yes then I suggest that you are extremely careful with numbers. Depending upon the dollar amount of your reporting you will be asked a different set of questions. You should carefully understand each question before filling in the data. Not all income/assets need to be reported in the FBAR filings. Over declaring your assets/income can be as troublesome as not declaring or not filing FBAR.
I can suggest a couple of things to ensure the compliant filing of your FBAR this year.
A.) Print detailed instructions of the FBAR forms (There are different forms based upon your earnings). Carefully read each form and understand what kind of data needs to report. If you are not 100% sure then you may write to the Department of Treasury for clarification. Do not rely on the verbal explanation as that may not be sufficient in case of a future audit.
B.) Consult with your Tax Professional who has experience in foreign taxes and the US taxes. I recommend that you set up a consultation appointment to discuss your international affairs. This will allow you to clearly understand the rules and remove any ambiguity.
You can also have your tax professional file the FBAR. They will also have to do it electronically but you will have some peace of mind that it got done right.
Still confused – Join our upcoming webinar about FBAR
There is a special perk for joining our FBAR webinar – you can win a free pair of tickets to the marine world 6 flags.