Foreign Bank and Financial Accounts Reporting (FBAR)
What is Foreign Bank and Financial Accounts Reporting (FBAR)
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury.
Who Must File an FBAR
United States persons are required to file an FBAR if:
1. the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
The FBAR is a calendar year report and must be filed on or before June 30 of the year following the calendar year being reported. There is no provision for requesting an extension of time to file a FBAR.
Note: The recently enacted Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changes the standard FBAR due date to April 15 beginning with the 2016 calendar year reports, which are due in 2017.
Those required to file an FBAR who fail to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,000 or 50 percent of the balance in the account at the time of the violation, for each violation.
When calculating your balance, use the treasury rates for conversion.
Click here for the Reporting Link.
The IRS explains the difference between 8938 reporting obligation (due with your Income Tax return) and FBAR Reporting.
If you need assistance with filing or if you want us to file the form on your behalf, please contact us.
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Your dedicated accounting team at Naomi Yarimi, CPA, PLLC