The Financial Crimes Enforcement Network (FinCEN) intends to push for amendments of the Bank Secrecy Act to include foreign virtual currency as a reportable account for the FinCEN 114 (FBAR).
If this proposed amendment gets passed, owners of foreign virtual currencies may need to file an FBAR if the highest aggregate value of all their foreign accounts, including virtual currencies, reach the $10,000 threshold for filing the FBAR. Not only will owners of foreign virtual currency have the FBAR reporting burden, banks and money service businesses will also need to track records of customers making crypto transactions and submit reports. Although this will create burdensome recordkeeping requirements, FinCEN insists these new measures must be taken to cut down on crimes involving virtual currencies.
FinCEN Notice 2020-2 provides little detail about when this may become effective and what exactly will need to be reported. There is a small window for review and comment on the proposed amendment, however, many insist this does not allow the public enough time to comment and feel FinCEN is not willing to consider any arguments against the proposed regulations.
Please consult a qualified tax professional for any questions or assistance. This information is general in nature and should not be relied on.
Jill A. Helm, CPA