What Is the FBAR?
FBAR (Report of Foreign Bank and Financial Accounts) is required filing to report foreign bank account information. This information is reported to the Department of the Treasury on Form TD F 90-22.1, which can be found here. These forms are due on June 30 and there are NO EXTENSIONS for filing it. Effective July 1, 2013 these forms will need to be electronically transmitted.
Who Needs to File?
FBAR must be filed if the following criteria are met:
- A United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
Don’t be fooled by the language “United States Person.” This does not just include people! It also applies to businesses, partnerships, trusts- any entity formed under the laws of the United States.
You also need to understand the $10,000. This is a balance of $10,000 at any point of the year for any period of time, not just the end of the year. For example, if you have a foreign bank account and you transfer $10,000 for one day during the year and then transfer it right back out, you would have an FBAR filing requirement.
What If I Don’t File?
There are severe penalties for persons who do not file the FBAR when there is a filing requirement. The penalties can range from $10,000 up to the greater of $100,000 or 50 percent of the account balances. In some case criminal penalties can apply.
What To Do
If you think you might have an FBAR filing requirement, contact a CPA. These forms are complicated and time sensitive, and with big penalties attached. This is one form you do not want to take lightly.
