On June 23 The Internal Revenue Service reminded everyone who has one or more bank or financial accounts located outside the United States, or signature authority over such accounts that they may need to file an FBAR by next Tuesday, June 30.
FBAR refers to Form 114, Report of Foreign Bank and Financial Accounts, which must be filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department. It is not a tax form and cannot be filed with the IRS. The form must be filed electronically and is only available online through the BSA E-Filing System website.
In general, the filing requirement applies to anyone who had an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2014. Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them.
FBAR filings have surged in recent years, topping the one-million mark for the first time during calendar-year 2014. The FBAR requirement is separate from the requirement to report specified foreign financial assets on a U.S. income tax return using Form 8938. A brief comparison of the two filing requirements is availableon IRS.gov.
For more on filing requirements for the FBAR, see Current FBAR Guidance on IRS.gov.
Agencies Issue Flood Insurance Rule
Five federal regulatory agencies today announced the approval of a joint final rule that modifies regulations that apply to loans secured by properties located in special flood hazard areas. The final rule implements provisions of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) relating to the escrowing of flood insurance payments and the exemption of certain detached structures from the mandatory flood insurance purchase requirement. The final rule also implements provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 (the Biggert-Waters Act) relating to the forced placement of flood insurance.
This final rule does not address the private flood insurance provisions in the Biggert-Waters Act. The agencies plan to address these provisions in a separate rule making. The final rule is being issued by the Board of Governors of the Federal Reserve System, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency. For more information,click here.
Mark your calendar! Bankers eCampus will host a webinar on this new Flood Insurance Rule on August 6th at 2 PM CST. More details about this webinar will be available soon.
When Your Customer Changes SSN with DHS Authorization
The Social Security Administration requires any person who has a change in his or her immigration or citizenship status to report that change to the Social Security Administration.
Reporting this change is actually to the benefit of your account holder, the new citizen. The social security database will be updated showing them as a US citizen. This database is shared with all federal agencies and many state agencies, further validating their US citizenship status with the federal and state governments.
With their social security records updated showing them as a US citizen, it will be much easier in the future to apply for and receive all social security benefits entitled to them.
If they ever have to replace their social security card, obtaining a new card will be easier now that they are a US citizen. In some states, certain disability benefits are only available to US citizens. By changing their citizenship status with the Social Security Administration they will ensure they receive all disability, retirement and social security benefits for which they qualify as a US citizen.
Your account holder must report the change by completing Form SS-5 and by visiting the local Social Security Administration office in person. The change can be done by mail, but the SSA does not recommend it.
When they visit the Social Security Administration office, they must bring proof of US citizenship such as a Certificate of Naturalization or a US passport and some other form of picture ID such as a driver's license. They must also bring the completed Form SS-5 or they can just obtain the form there and complete it while they are waiting.
Your account holder will be interviewed by the Social Security Administration office staff. The staff will verify the citizenship and then update the records. Updating social security records will not result in a new social security card being issued unless there were restrictions on the old card.