Does your organization have foreign bank accounts that exceed $10,000 in the aggregate at any point during the year, including accounts held by subsidiaries? If so, you may have a Report of Foreign Bank and Financial Accounts (commonly known as FBAR) filing obligation.
But even if you’ve had to submit FBAR filings in the past, this year’s obligation presents a twist: Unless you’re filing as an individual, your 2012 FBAR filings (due on or before June 30, 2013) must be completed via the Financial Crimes Enforcement Network (FinCEN) e-file process. Further, FinCEN won’t accept printed versions of the forms produced by its BSA E-Filing System, and such a submission won’t meet the reporting requirements under Title 31, Part 103, of the Bank Secrecy Act.
It’s worth noting that the process for electronic filing isn’t similar to e-filing a tax return, in which a return is prepared offline and then uploaded to the Internet. Rather, the FBAR is completed wholly online, without additional software. The reason for the difference? FBAR filings are covered under the BSA and not the Internal Revenue Code, which means the filing and reporting fall outside the IRS’s jurisdiction.
Perhaps the most significant change, however, involves who must prepare the filing. FinCEN now requires that the filing be done by the entity—filings cannot be done by paid preparers. In other words, accountants and attorneys cannot file on behalf of a client, and there’s no authorization available to shift the filing obligation to another party. Paid preparers can still help entities prepare the electronic forms for BSA e-filing and generally help companies through the process, but the entity must submit the filings on its own behalf.
To file, your organization must register with the BSA E-Filing System, which requires users to certify their identity and authority to file on behalf of their business entity. It also requires organizations to identify a “supervisory user” who has primary responsibility for the filing organization’s use of the BSA E-Filing System. This user should be cognizant of all BSA filing activities across the organization and be knowledgeable of the individuals responsible for preparing and submitting BSA filings and the processes by which filings are submitted.
In addition, within the secure area of the BSA E-Filing Web site, supervisory users have access to functionality not available to regular users, including the ability to initiate the enrollment of new users, manage user access and privileges, update filing organization information, and track the status of filings submitted by all users from the organization.
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We realize that this change in process creates complexities for filers. We’re also aware that certain organizations are requesting that the process be modified to allow assistance from preparers. In the meantime, however, the above rules are effective.
If you have questions about how the new process works or would like preliminary help putting together your FBAR filing information in advance of e-filing, please contact your Moss Adams LLP tax professional.
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The material appearing in this communication is for informational purposes only and should not be construed as legal, accounting, or tax advice or opinion provided by Moss Adams LLP. This information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials have been prepared by professionals, the user should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Moss Adams LLP assumes no obligation to provide notification of changes in tax laws or other factors that could affect the information provided.