Changes to Tax & FBAR Filing Deadlines: U.S. Tax Obligations

Important Changes to Tax & FBAR Filing Deadlines for U.S. Tax Obligations

Changes in one’s tax filing obligations are essential pieces of information. If one fails to remain informed regarding potential changes to the U.S. Tax Code, there is a high likelihood that one or more tax or offshore information filing obligations will be missed. Unsatisfied tax obligations including those that have not been addressed due to mistake, error, or lack of knowledge can carry harsh financial penalties and other consequences.

A number of important changes to tax filing deadlines was recently passed as part of the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015”, signed into law by President Obama on July 31, 2015. While the focuses of the act were funding for highways, highway safety, public transportation, and veteran’s welfare the law also contained important tax provisions. These provisions effect the filing dates for individuals with a Report of Foreign Bank and Financial Accounts (FBAR) reporting obligations, partnership tax returns, and some corporate returns.

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New FBAR Filing Deadline May Take Foreign filers By Surprise

In recent years, the FBAR obligation has been an extremely hot topic. The creation of a harsh penalty for even accidental, non-willful compliance failures has resulted in a major focus on FBAR. That is, even a simple mistake can result in a $10,000 penalty if the filing failure is detected. This penalty can be imposed for each year where the account went unreported.

However, penalties are even more severe when it appears that the failure was motivated by a voluntary or intentional disregard of a known legal duty. Upon convictions penalties for willful failure to file FBAR can be punished by fines that routinely exceed the original value of the account.

In light of such severe consequences, it is essential that taxpayers satisfy this duty. While the previous deadline was June 30th of each year, the new deadline aligns the FBAR deadline with the typical tax filing deadline: April 15. Individuals who are living abroad in Canada or other nations receive an automatic extension to June 15. However, even with the automatic extension the filing deadline, the filing deadline has been expedited, though a taxpayer may file to extend the deadline to October.

Beware of the Earlier Partnership Filing Deadline

Previously, the filing deadline for partnership returns was the 15th day of the fourth month after the close of the partnership’s tax year. Under the act, this filing deadline has been moved up by one month to March 15. These changes also apply to S Corporations as well. The logic behind this change is that partnerships and S corporations are pass-through entities meaning that the shareholders report the corporation’s taxable income on their personal income tax return. The previous filing date did not permit ample time for partners and shareholders to get their personal return in order. Under the new deadline, partners and shareholders will have a month form the partnership filing deadline until the personal return filing deadline.

An Extended Filing Date is Available for Some Corporate Return Filers

Previously, corporate tax return filings were due for a corporation on the third day of the 15th month after the close of the corporation’s tax year. For corporations with a calendar year close of their fiscal year, this means that the old filing deadline was March 15. Under the new law, however, that deadline has been pushed back one month to the fifteenth day of the 4th month. For a corporation with a calendar year close of their fiscal year, the new deadline is April 15.

The new rules generally apply to taxable years beginning on or after January 1st, 2016. However corporations with a fiscal year end of June 30 are subject to a special rule. These corporations retain the previous filing deadline. Corporations that unfortunately fall within this except can, however, receive a 7 month extension. All other corporations are limited to a 6 month extension.

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Rely on the Hoffman Law Offices for Your Personal and Business Tax Concerns

The Hoffman Tax Law Office prides itself upon providing professional, experienced, and timely guidance for tax concerns, audits, and tax controversies. To schedule a private, no-charge tax consultation with an experienced tax attorney call our firm at 800-897-3915 or contact us online today.

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