7 Important Facts About FBAR (Foreign Bank Account Reporting) – Board-Certified in Tax, Golding & Golding
7 Important Facts About FBAR (Foreign Bank & Financial Accounts)
The IRS requires all U.S. Persons with foreign accounts to file an electronic annual FBAR statement in any year in which the annual aggregate threshold of foreign bank and financial accounts exceeds $10,000.
Contents
- 1 7 Important Facts About the FBAR
- 2 Foreign Bank Account Disclosure Lawyers Golding & Golding, A PLC
- 3 7 Key FBAR Tips
- 4 FBAR is not $10,000 Per Account
- 5 FBAR Includes More than Bank Accounts
- 6 It Includes Accounts That May Not Belong to You
- 7 You May Have Just Taken Your First Steps
- 8 Your Accounts May be Dormant
- 9 Maximum Balance is Tricky
- 10 You Cannot Just File a Late FBAR or File Forward
- 11 Interested in IRS Foreign Bank Account Amnesty
7 Important Facts About the FBAR
The failure to report the FBAR may result in significantly high fines and penalties
Our goals is for you to avoid foreign account penalties.
Foreign Bank Account Disclosure Lawyers Golding & Golding, A PLC
Golding & Golding represents clients worldwide in over 70-countries exclusively in Streamlined, Offshore and IRS Voluntary Disclosure matters. We have successfully completed more than 1,000 streamlined and voluntary disclosure submissions.
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7 Key FBAR Tips
We have authored countless articles on FBAR, FATCA and other offshore reporting. But, with the FBAR deadline approaching, here are 7 Important Facts about the FBAR:
FBAR is not $10,000 Per Account
This is a very common misconception. The FBAR is required in any year that the annual aggregate total of ALL accounts exceeds $10,000.
FBAR Includes More than Bank Accounts
You would think – logically – that because the acronym FBAR technically stands for Foreign Bank Account Reporting, that the FBAR is limited to bank accounts, but the IRS makes it more complicated than that.
FBAR includes Foreign Bank and Financial Account Reporting.
Some examples of additional accounts, include:
- Investment Accounts
- Foreign Pension
- Foreign Life Insurance
It Includes Accounts That May Not Belong to You
To continue with the lack of logic associated with FBARs — even if you are merely a signatory on a parent’s account, or employer account, you still have to report the account(s) on the FBAR.
You May Have Just Taken Your First Steps
Yep. Minor children are also required to report the FBAR.
So, take time out of your day to thank your in-laws for opening that college fund overseas, which now subjects your little toddler to FBAR reporting (But be nice to the in-laws, since they were only trying to help).
Your Accounts May be Dormant
In some countries, such as India, an account can lay dormant for 40-years, and the institution simply does not close the account. For you, that means if you have 2 accounts with an annual aggregate total of $400,000 — and 7 dormant accounts — you will report 9 accounts in total. This is true, even if you have not accessed the account in years.
Maximum Balance is Tricky
In the United States, it is common to just be able to go online and access your entire account history for the last 3-5 years. But, in most foreign countries, this is not possible. And, if you have a passbook or similar account, the institution may only provide updated balances when you bring your passbook to the bank — which may happen only every few years, depending how often you get to visit the institution.
The IRS requires a diligent and reasonable search of the data, but if you can’t access all the data — this is not normally fatal to an FBAR submission.
You Cannot Just File a Late FBAR or File Forward
If you missed filing in prior years, the IRS has developed amnesty programs to help ease the pain and burden of late reporting. In fact, some programs even offer a penalty waiver.
Also, do not just begin filing forward. This is considered an illegal quiet disclosure, since you are intentionally omitting required filings from prior years.
Golding & Golding (Board Certified Specialist in Tax Law)
Interested in IRS Foreign Bank Account Amnesty
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in IRS Offshore/Foreign amnesty procedures. Contact our firm today for assistance with getting compliant.