Worldwide Tax Daily Quotes Zhanna Ziering on New FBAR Rule
Caplin & Drysdale

Worldwide Tax Daily Quotes Zhanna Ziering on New FBAR Rule

Date: 3/3/2016

Zhanna A. Ziering spoke with Worldwide Tax Daily on the new proposal released March 1st by the U.S. Treasury's Financial Crimes Enforcement Network requiring FBAR filers to provide greater detailed account information, but offering a broader filing exemptions to employees with signature authority over the employer accounts. For the complete article, please visit Worldwide Tax Daily's website (subscription required).

Excerpt taken from the article "U.S. FBAR Changes Try to Balance Compliance Burden, Enforcement" by Andrew Velarde for Tax Notes Today.

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Zhanna A. Ziering of Caplin & Drysdale Chtd. argued that although this piece of the guidance is meant to be taxpayer friendly by broadening the signature authority exemption, the new rule change may have unintended consequences that could exclude more individuals from the filing exemption than may have been anticipated.

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Another piece of the notice of proposed rulemaking may likewise require clarification. The new rules would make changes to reflect the new FBAR filing due date of April 15, effective with the 2016 reporting year, and reflect that extensions to October 15 on the reporting year are available upon request.

"What is glaringly absent from the proposed revisions to the rules, FBAR instructions, or the form itself is a method by which a filer can request such extension," Ziering said. "However, given that the filing due date change is not effective until 2017, FinCEN hopefully has some time to design and implement this process."

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Reevaluating the 25 Accounts or More Exemption

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Ziering said that FinCEN's impetus for its "drastic move" was understandable but that logistically it may be more complicated than the agency anticipated.

"It is true that the relevant information must still currently be assembled and maintained by the filer in order to make the truncated filing," Ziering said. "However, the current iteration of the electronic Form 114 will make inputting this information into the form an administrative nightmare."

Ziering said that FinCEN should consider allowing filers to upload an attachment that provides all the required information for each of the accounts. "But even then, this will not be an easily digestible or welcome change under any circumstances, and it will make the filing process significantly more onerous and expensive. And in light of that, it is uncertain whether it will actually provide a real benefit to the government," she said.

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