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FinCEN is the Financial Crimes Enforcement Network, a bureau of the Treasury Department, which is tasked, among other things, with monitoring offshore financial transactions in order to detect money laundering and terrorist financing. Most of us in the tax world know it as the black hole into which various reports of offshore financial activities must be filed, including the FinCEN Form 114, the Foreign Bank Account Report (FBAR).
This month, FinCEN issued a press release, which can be found by clicking here, informing the public that it has issued a Notice of Proposed Rulemaking proposing clarifications and revisions to the FBAR rules applicable to a certain financial professionals. According to the press release, the NPRM proposes to:
1. Remove the provisions that limit the information reported with respect to situations when a filer has 25 or more foreign financial accounts, and instead require all U.S. persons obligated to file an FBAR to report detailed account information on all foreign financial accounts for which they are required to file an FBAR;
2. Amend the FBAR regulation by eliminating the requirement for officers and employees of institutions to report on institutional accounts for which they have signature authority, but no financial interest, due solely to their employment, so long as their employer has an FBAR filing obligation; and
3. Require institutions to maintain a list of all officers and employees with signature authority over those same accounts; this list would be made available to FinCEN and law enforcement upon request.
These proposed rules would seem to make the process simpler by putting additional responsibilities on the institutions, but reducing the responsibilities of individuals within those institutions who only have signature authority because of their role as an employee.
The FBAR for 2015 is due on June 30 of 2016. Recent revisions will require the FBAR for 2016 and beyond to be filed on April 15 of the following year.
Daniel Layton, the author of this post, is a former IRS attorney and former Federal tax prosecutor in private practice in Southern California. He is the principal of Tax Attorney OC.