Some bad FBAR news for Filipinos with U.S. bank accounts. A challenge to the reporting rules on bank interest paid to foreigners falls flat. U.S. banks that pay interest of $10 or more to a resident of a foreign country with an information exchange pact with the U.S. must file Form 1042-S with the IRS and the account holder to report the interest, even if it is not subject to U.S. tax.
The IRS typically shares the data with the country in which the U.S. account owner resides. After two bankers’ groups filed a lawsuit challenging the regulations, a lower court agreed with the IRS that reporting helps deter tax evasion and rejected claims of harm to the U.S. banking system. Now an appeals court panel has thrown out the lawsuit without even ruling on the merits of the dispute (Florida Bankers Assn., D.C. Cir.).
So much for privacy. If you are a Filipino living in the Philippines with an U.S. bank account, big brother in the U.S. has its eyes on you and will share what it sees with the Philippine government.
Change in FBAR filing date. The filing date for the FBAR Report for U.S. taxpayers with foreign accounts in the Philippines and elsewhere in the world has been moved up. In 2014, U.S. taxpayers that are owners of foreign accounts with over $10,000 in assets must e-file FinCEN Form 114 by June 30, 2015. Beginning with tax year 2016, the form will be due on April 15, 2016. However, taxpayers will for the first time be allowed to request an additional six months to file.
This is one filing date you do not want to miss. The penalties for not filing are severe.
