The federal government has once against extended the deadline for filing the Report of Foreign Bank and Financial Accounts (FBAR) form for employees who are signatories on a company's foreign bank accounts, but have no financial interest in those accounts.

The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury, announced late last year that it had pushed the deadline, which had been June 30, 2015, back to June 30, 2016.

Consultants say that despite the extension, many companies are going ahead and filing the reports.

“If you think that ultimately you have to file, it doesn't hurt to file it now,” said Bob Adams, a partner in McGladrey's national tax office in Washington.

Melody Hart, a senior consultant at Strategic Treasurer, noted that even though the deadline was extended, companies eventually have to file forms, or give employees the information they need to file forms, for each year back to 2010.

“I think some people are hoping it will go away, but you're just adding up the years you're going to have to do,” Hart said. As time passes, companies may have a harder time gathering the data needed for the forms for earlier years, she added. And if employees with signature authority leave the company, the company could face the additional chore of having to track them down to give them the information.

The FBAR requirement, part of the government's effort to crack down on money laundering, has two parts. An employee who has to file must check off a box on Schedule B of his or her federal tax form and indicate the country in which the bank account is located. Then the employee has to file a form with FinCEN that gives the bank's name, the account number, and the highest balance in the account during the year. Companies are obligated to provide the information employees need to fill in the form, and companies may go ahead and file the form on behalf of their employees. A survey conducted last year by Strategic Treasurer showed a little more than half of companies were filing the form for employees.

In its announcement, FinCEN said the latest extension was the result of “questions regarding the filing requirement and its application.”

The questions have to do with “the interpretation of the scope of the signature authority reporting exemptions,” a spokesperson said in an email. “In other words, we are looking through the various and complicatedrelationships that financial professionals often have with have different types of foreign accounts.”

Who Must File?

Companies have been uncertain about which employees should file FBAR forms. Some companies think that only executives with the power to sign checks must file the forms, said Tom Hunt, director of treasury services at the Association for Financial Professionals, while others interpret the requirement to include treasury analysts or clerks who are authorized to set up or approve wires, and some add in executives named in board resolutions approving new bank accounts.

Given the severity of the penalties for not filing, most companies “take a very conservative approach,” Hunt said. “It's a very ambiguous disclosure process that leads to a lot of frustration for a lot of treasurers.”

Treasury departments also face a challenge in coming up with the data to fill in the FBAR forms.

Compiling the information “is a problem unless they have a system that tracks everything for them,” Hart said. “A lot of people are on spreadsheets on this. Some companies, if they're decentralized, they're dependent on going out to divisions and asking for information.”

Having to come up with a list of all the employees with signature authority is another challenge. “It's forced treasury departments to really clean up their account structure and keep account of their signatories much more so than they have in the past,” Hunt said. “Ultimately the final record is what the bank shows, but we've seen that banks might not always make signer changes that you request.”

FinCEN now requires FBAR forms to be filed electronically. Hart noted that FinCEN has put in place a way for treasuries or accounting firms to batch-file FBAR forms, instead of having to file each individual's form separately.

Adams said companies should be sure to notify employees who are required to file an FBAR. “Companies need to think about who their signatories are, and they need to probably remind all of their signatories each year,” he said.

Consultants say FBAR is another factor that could encourage companies to adopt electronic bank account management (eBAM) systems and other technology solutions.

“We're moving to a point where we really need to manage our bank accounts, in an automated fashion, because of all of these compliance requirements,” Hart said.

Instant Insights /

Deadline for FBAR Filing Pushed Back Again

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