OUR THOUGHTS ON:

Form 990 Automatic Six-Month Extension and FinCEN Report 114 Change in Due Date Passed by the House and Senate

Not-for-Profit|Tax

By Melanie Pantalone

On July 28, 2015, U.S. Representative Bill Shuster (R-PA) introduced Legislation Bill H.R.3236 - Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.  In Section 2006 (b)(4), Tax Return Due Dates, the bill states, "The maximum extension for the returns of organizations exempt from income tax filing Form 990 (series) shall be an automatic six month period ending on November 15 for calendar year filers."  This legislation will allow exempt Form 990 organizations to file one six-month extension, five and a half months after the year-end established by the organization.  The current-year legislation requires two extensions; the first extension at five and half months and the second extension at eight and a half months after the organization’s year-end. 

FBAR Filing Provisions

Included in Bill H.R.3236 is the change in the due date of form FinCEN Report 114, also known as FBARS.  In Section 2006 (b)(11), Tax Return Due Dates, the bill states, "The due date of FinCEN Report 114 (Relating to Report of Foreign Bank and Financial Accounts) shall be April 15 with a maximum extension for a 6-month period ending on October 15 and with provision for an extension under rules similar to the rules in Tres. Reg. Section 1.6081-5.  For any tax payer required to file such Form for the first time, any penalty for failure to timely request for, or file, an extension may be waived."  The current-year due date of the FinCEN Report 114 is June 30, not allowing any extensions.  The fine for failing to file a complete and correct FBAR may be subject to civil penalty not to exceed $10,000.  For willful violations, the penalty may be the greater of $100,000 or 50% of the balance in the account at the time of violation.  With this legislation, the IRS will be more lenient on first-time filers.

This legislation passed the House on July 29, 2015 and the Senate on July 30, 2015.  This bill will now be sent to President Barack Obama for his signature.  To stay current with the progress of this bill, visit website www.congress.gov and search current legislation, H.R.3236.

Contact us if you have questions regarding your organization's Form 990 or FinCEN Report 114 and visit the Our Thoughts On blog for more articles pertaining to the not-for-profit industry.

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