FBAR Filing – What is it? Who Must File & When is it Due?
FBAR Filing: For U.S. persons with foreign accounts and assets, FBAR filing can be a bit of a stressor. The form must be filed with the IRS electronically, the due date continues to change, and the failure to timely file the FBAR may result in significant fines and penalties.
Questions about FBAR filing are common, and we have authored countless articles on FBAR Filing. But, sometimes the best way to help out the general public – especially those new to FBAR Filing – is to come back to the basics.
In this article, we will answer the following questions:
- What is the FBAR?
- Who Must file the FBAR?
- When is the FBAR due?
- What is included on the FBAR?
- What if the FBAR Is not filed?
- What if the FBAR is filed late?
- What are the Penalties?
- How can I avoid FBAR Penalties?
What is the FBAR?
The FBAR is foreign bank account reporting form. The FBAR is also referred to as Foreign Bank and Financial Account Reporting and/or FinCEN Form 114. FinCEN is the Financial Crimes Enforcement Network. And, even though the FBAR was developed by FinCEN, it is enforced by the IRS.
Who Must file the FBAR?
The FBAR is filed by any U.S. Person (individual, entity, trust, estate) that meets the threshold requirements for filing. The threshold requirement is simply that the filer has “more than $10,000 in aggregate annual total in foreign accounts on any day of the year.”
When is the FBAR due?
The FBAR is due on April 15. But, currently (subject to change), the FBAR is on automatic extension to coincide with the filing of your tax return.
What is included on the FBAR?
Generally, the only information required for the FBAR is the filer’s identifying information, and the information about each account:
- Foreign Financial Institution Name
- Account number
- Maximum balance
*The FBAR is an international “reporting form.” It is not a tax form, so whether or not the account generates income that may lead to a U.S. tax liability does not impact the filing of the FBAR.
What if the FBAR Is not filed?
If the FBAR is not filed, it may lead to fines and penalties.
What if the FBAR is filed late?
There is no “extension” form for the FBAR. If the FBAR is filed late, the filer is still subject to the same penalties as if the FBAR was not filed.
What are the Penalties for FBAR?
The penalties range extensively. Sometimes, the IRS may issue warning letter in lieu of penalty. Other times, the IRS can hit the filer with a $10,000 per account, per year penalty; willful penalties of 50% maximum balance of the account (per year, up to 100% value of the account), or criminal penalties.
Can I avoid FBAR Filing Penalties?
Yes, you may be able to reduce, minimize & avoid FBAR Penalties.
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We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants and Financial Professionals worldwide.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced FBAR Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
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Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.
Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.