The federal government has once against extended thedeadline for filing the Reportof Foreign Bank and Financial Accounts (FBAR) form foremployees 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 theU.S. Treasury, announced late last year that it had pushed the deadline, whichhad been June 30, 2015, back to June 30, 2016.

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

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

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

“I think some people are hoping it will go away, but you're justadding up the years you're going to have to do,” Hart said. As timepasses, companies may have a harder time gathering the data neededfor the forms for earlier years, she added. And if employees withsignature authority leave the company, the company could face theadditional chore of having to track them down to give them theinformation.

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

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

The questions have to do with “the interpretation of the scopeof the signature authority reporting exemptions,” a spokespersonsaid in an email. “In other words, we are looking through thevarious and complicatedrelationships that financial professionalsoften have with have different types of foreign accounts.”

Who Must File?

Companies have been uncertain about which employees should fileFBAR forms. Some companies think that only executives with thepower to sign checks must file the forms, said Tom Hunt, directorof treasury services at the Association for FinancialProfessionals, while others interpret the requirement to includetreasury analysts or clerks who are authorized to set up or approvewires, and some add in executives named in board resolutionsapproving new bank accounts.

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

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

Compiling the information “is a problem unless they have asystem that tracks everything for them,” Hart said. “A lot ofpeople are on spreadsheets on this. Some companies, if they'redecentralized, they're dependent on going out to divisions andasking for information.”

Having to come up with a list of all the employees withsignature authority is another challenge. “It's forced treasurydepartments to really clean up their account structure and keepaccount of their signatories much more so than they have in thepast,” Hunt said. “Ultimately the final record is what the bankshows, but we've seen that banks might not always make signerchanges that you request.”

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

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

Consultants say FBAR is another factor that could encouragecompanies to adopt electronicbank account management (eBAM) systems and other technologysolutions.

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