Foreign Bank and Accounting (FBAR)

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FinCEN (Financial Crimes Enforcement Network) Form 114,  Report of Foreign Bank and Financial Accounts, is used to report a Financial Interest in or Signature Authority over a Foreign Financial Account.

Who Must File an FBAR?

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A United States Person (Resident) that has a Financial Interest in or Signature Authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the Calendar Year.

Individual

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A person means an individual (including a minor child) and legal entities including, but not limited to, a limited liability company, corporation, partnership, trust, and estate.

Signature Authority

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Signature authority is the authority of an individual (alone or in conjunction with another individual) to control the disposition of assets held in a foreign financial account by direct communication (whether in writing or otherwise) to the bank or other financial institution that maintains the financial account.

Information to Include on the FBAR (Financial Account)-

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A financial account includes, but is not limited to, security, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution).

Foreign Financial Account.

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A foreign financial account is a financial account located outside of the United States. For example, an account maintained with a branch of a United States bank that is physically located outside of the United States is a foreign financial account.

How to File the FBAR?

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FBAR must be filed electronically through FinCEN’s BSA E-Filing System. Individuals have the option of letting a tax professional file the form for them as part of the tax preparation services. In doing so, your tax preparer should have Form 114a as documented authorization from the Individuals to submit the FBAR on your behalf.

FBAR Deadlines

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The FBAR must be received by the Department of the Treasury on or before April 15th of the year immediately following the calendar year being reported. FinCEN will grant filers failing to meet the FBAR annual due date of April 15th (an automatic extension to October 15th each year).

Are there any penalties for not filing the FBAR?

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If you’re aware of your requirement and do not file accurately, or if you don't file it on time, you could get hit with a $100,000 penalty per violation or an even higher penalty, depending on your account balances at the time of the violation.

The tax team at our firm will be happy to assist you in assisting FBAR Filing. Crescent Tax Filing. Get started today by reaching out to one of our Tax Experts!