09 Apr Foreign Bank and Financial Account Reporting Requirements
What is an FBAR you ask? A bad, four-letter word? No, but failing to file one of these can make you say a few other bad, four-letter words! U.S. citizens, resident aliens and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) by April 15th each year.
*For 2020 filing year: the extended deadline to May 17, 2021 does not affect the FBAR requirement.
Who must report
The Bank Secrecy Act requires U.S. persons to file a FBAR if they have:
- Financial interest in, signature or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account in a foreign country, and
- The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.
The 2021 FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) and is only available through the BSA E-Filing System website.
Penalties for failure to file an FBAR
Not filing an FBAR when required may result in civil and criminal penalties, including a fine and/or prison. The IRS will not penalize those who properly reported a foreign account on a late-filed FBAR if the IRS determines there was reasonable cause for late filing.
Call us to help you through all this!