Past Due U.S. Tax Returns and FBAR FinCEN Form 114 | U.S. Expats in Colombia

If you are a U.S. expat in Colombia with past due tax returns or unfiled FBAR requirements, getting caught up now could avoid harsh penalties.

If you are a U.S. expat living in Colombia who is filing late, overwhelmed with multiple years of past due returns, or just discovering you have been required to report your foreign bank accounts, you are not alone. In fact, these are some of the most common mistakes that new expats in Colombia can make in their first years living abroad. 

Past Due U.S. Tax Returns 

A past-due tax return, simply put, is a tax return you were obligated to file and missed the filing deadline. This could have happened for a variety of reasons such as:

• Not knowing you were still required to file while living outside of the United States.
• A misunderstanding of the IRS definition of self employment income, and the responsibilities that come with earning self employment income vs. wages.
• Not having applied for an extension to be able to collect all necessary information in time.
• Misunderstanding that even if you don’t owe any tax doesn’t necessarily mean you don’t need to file.
• Simply just letting the time slip away from you while in the city of eternal spring.

The good news is that even if you have unfiled tax returns, there is an opportunity to get caught up. And considering that there is no statute of limitations on unfiled returns,  this opportunity to file late is indefinite, as opposed to the time limit you have to amend a return. The IRS has shown increased flexibility with American taxpayers living abroad who demonstrated a willingness to become tax compliant in recent years.

What Does FBAR Mean for Expats in Colombia?

FBAR [CC1] is short for the ‘report of foreign bank accounts,’ and it’s a provision of the Bank Secrecy Act (BSA). This provision requires U.S. individuals with at least $10,000 in foreign bank account(s) to complete an FBAR filing.  This applies to the bank account(s) that you own, such as a checking or savings, or any accounts where you have signature authority.

 Submitting your FBAR filing is simply a reporting requirement, so the payment of additional taxes is not required. However many new U.S. expats could have missed this obligation for a variety of reasons, such as:

Unfortunately, forgetting or simply not knowing about FBAR requirements is another common issue that new U.S. expats may face, but not filing can come with some severe consequences. Similarly to filing your past due tax returns, you can get caught up and file your FBAR requirements past the deadline as well.