You make the callBy: National Association of Tax Professionals
June 9, 2022

Question: Nazish just realized that she inherited money from her mother in India. The funds are in an Indian bank account with a balance over $10,000 USD. She did not report it on her 2021 Form 1040, U.S. Individual Income Tax Return, nor did she file a 2021 FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Her accountant filed her 2021 Form 1040 in June 2022. Can Nazish still correct the inadvertent omission of this account on her Form 1040 and timely file the FBAR?

Answer: Yes, Nazish can correct her Form 1040 and timely file the FBAR for 2021. She can amend her Form 1040 to include interest from the bank account on Schedule B, where she will correctly answer “Yes” to both questions under Part III, Line 7a, indicating that she did have signatory authority over a financial account in a foreign country. She’ll include the name of the foreign county (India) for question 7b.

Although the FBAR is required to be filed annually by April 15, the return is automatically extended to Oct. 15, with no extension form required to obtain the additional time to file. Even though she did not file an extension, as long as the FBAR is submitted by Oct. 15, her return will be considered timely filed for 2021. The FBAR is not an IRS form and can only be filed electronically through the BSA E-filing system, unless an exemption is granted by calling the FinCEN Regulatory Helpline, which will send a paper version of the return.

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penAbout National Association of Tax Professionals

The National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.

The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.

Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.

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