The Treasury Department's Financial Crimes Enforcement
Network (FinCEN) announced an automatic six-month extension for
taxpayers required to file FinCEN Form 114, Report of Foreign Bank
and Financial Accounts (FBAR). Taxpayers now have until October 16
to submit their FBARs for 2016 without being subject to
FBAR Overview. Subject to certain exceptions, any
United States person with an interest in, or signature or other
authority over, one or more foreign financial accounts whose
aggregate value exceeds $10,000 at any time during a calendar year
is required to file an FBAR in the following year.
Foreign financial accounts include bank accounts, brokerage
accounts, mutual funds and other pooled investment funds at foreign
financial institutions, including many types of foreign retirement
plans and life insurance policies.
For FBAR purposes, a U.S. person can be treated as the owner of
a foreign financial account owned (directly or indirectly) by a
corporation or a partnership if the U.S. person owns more than 50
percent of the voting stock of the corporation or more than 50
percent of the capital or profits interests in the
The above rule also applies to a U.S. person owning (directly
or indirectly) more than 50 percent of the beneficial interest in
the income or assets of a trust. However, beneficiaries of a trust
are not required to file FBARs with respect to accounts held by the
trust if the trustee files the necessary returns. If the grantor of
a trust is treated as the owner of the trust's income or assets
for tax purposes under the "grantor trust" rules, the
grantor is required to file FBARs for reportable accounts held by
For FBAR purposes, U.S. persons include disregarded entities,
such as single-member limited liability companies, that would not
otherwise be considered "persons" for most tax
Automatic Extension of Filing Deadline to October 15.
Until last year, FBARs were generally due on June 30, with no
automatic extensions available. In 2015, Congress moved the
deadline to April 15 beginning with FBARs for 2016 (due in 2017).
Congress also provided for extensions of up to six months. To
reduce the administrative burden and facilitate compliance, FinCEN
is granting all filers an automatic extension to October 15
every year, without the need for specific requests, until further
notice. Thus, FBARs for 2016 may be submitted as late as Monday,
Automatic Extension Only for FBARs. This automatic
extension is limited to FBARs. The deadline for most IRS returns
for foreign assets will not be extended unless the
taxpayer files an extension request with respect to the underlying
tax return. This includes IRS Form 8938 (Statement of Specified
Foreign Financial Assets), IRS Form 5471 (Information Return of
U.S. Persons With Respect to Certain Foreign Corporations), IRS
Form 8865 (Return of U.S. Persons With Respect to Certain Foreign
Partnerships) and IRS Form 8621 (Information Return by a
Shareholder of a Passive Foreign Investment Company or Qualified
Electing Fund), among others. IRS Form 3520 (Annual Return To
Report Transactions With Foreign Trusts and Receipt of Certain
Foreign Gifts), although filed separately from the filer's tax
return, is due at the same time as the filer's tax return,
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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One of the most publicized and long-awaited business provisions contained in the Omnibus Budget Reconciliation Act of 1993, P.L. 103-66, 107 Stat. 312 (1993) (the "1993 Act") was section 197 of the Internal Revenue Code of 1986 (the "Code"), which governs the tax treatment of acquired intangible assets. However, section 197 cannot be analyzed in isolation. Since it comes into play whenever there is an allocation of consideration to an amortizable section 197 intangible, a basic understanding of
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