What is the FBAR?
Form FinCEN 114, “Report of Foreign Bank and Financial Accounts”, normally referred to as FBAR, is used to report a financial interest or signature authority over a foreign financial account. Who Must File an FBAR?
FBAR is required for:
- US “persons” (meaning any US citizen, permanent resident, an alien resident, or entity such as corporations, LLCs, partnership, or similar)...
- Who have financial interest in and/or signature authority over foreign financial account(s) such as accounts in a bank, mutual fund, trust, brokerage, etc...
- If the total amount held in those accounts exceeded $10,000 USD at ANY point in the year
When the FBAR due?
The FBAR is due on April 15 of the year immediately after the year you’re reporting. However, the IRS grants an automatic extension until October 15th of the same year if the April 15th deadline was missed.
Can I get an extension?
Aside from the automatic extension until October 15th, no other extension is possible.
What’s the penalty for not filing an FBAR?
A person who is required to file an FBAR and does not properly do so can be liable for up to $10,000 in fines per violation (although the fee may be waived in case of a reasonable cause for failure to file). Willful neglect to file an FBAR is subject to a penalty of $100,000 or 50% of the balance in the account at the time of the violation, whichever is greater.
Are there exceptions to the requirement to file the FBAR?
Yes, the following may be subject to exception:
- Certain foreign financial accounts jointly owned by spouses
- United States persons included in a consolidated FBAR
- Correspondent/Nostro accounts
- Foreign financial accounts owned by a governmental entity
- Foreign financial accounts owned by an international financial institution
- Owners and beneficiaries of U.S. IRAs
- Participants in and beneficiaries of tax-qualified retirement plans
- Certain individuals with signature authority over, but no financial interest in, a foreign financial account
- Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust)
- Foreign financial accounts maintained on a United States military banking facility.
Are children required to file?
Yes. If the child is unable to file for some reason (like age), his or her guardian must do so on his or her behalf.