Virtual Currency and FBAR Reporting

According to U.S. law, if you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).

At the moment, Treasury’s FinCEN, does not expect virtual currency to be reported as part of the FBAR reporting. “Right now, we have not put out any guidance on reportability of bitcoin or any other virtual currency as part of FBAR. That being said, we do not expect it to be reported,” Jeremy Kuester, deputy associate director for policy at FinCEN, said at the American Institute of CPAs' National Tax Conference on November 7th, in Washington. “As the regulations are currently written, a virtual currency wallet would not fall under our definition of an account.” Kuester added that FinCEN may still consider putting out official guidance since it is still continuing to monitor the evolving situation.

Since July 1, 2013, the FBAR must be filed electronically through FinCEN's BSA e-filing system. In addition, and beginning with the 2016 filings this year, the annual due date for filing FBAR’s is April 15th.  This change was made, in order to align the due date with the filing deadline for individual income tax returns.  In addition, FinCEN grants an automatic extension to October 15th (a request for the extension is not required) for filers who fail to meet the FBAR annual due date of April 15th.

The FBAR filing deadline for U.S. citizens and residents residing abroad is the same as for citizens residing in the United States, i.e., April 15th with an automatic extension to October 15th.

The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.