First Time FBAR Filer? Helpful Tips for You to Correctly File an FBAR - Golding & Golding

First Time FBAR Filer? Helpful Tips for You to Correctly File an FBAR – Golding & Golding

First Time FBAR Filer? Helpful Tips for You to Correctly File an FBAR

The FBAR is the “Report of Foreign Bank and Financial Account Form.” It is enforced by the IRS and filed on a FinCEN 114 form.

It is used to report foreign accounts to the U.S. Government — if you meet the threshold requirements for doing so.

Common Questions we receive about the FBAR:

  • Does FBAR only include Bank Accounts?
  • What if the Account has less than $10,000?
  • Is the FBAR Part of my Tax Return?
  • Is FBAR the same as FATCA?
  • What if I do Not file the FBAR?

First Time FBAR Filer? 

At Golding & Golding, we specialize exclusively in Foreign Account, Assets, Investment and Income reporting. 

Each case is led by a Board-Certified Tax Law Specialist (a designation achieved by less than 1% of Attorneys nationwide).

Helpful Tips for You to Correctly File an FBAR

We have fielded several thousands of inquiries over the years on issues involving FBARs, and these are the five (5) most common questions and misconceptions we come across.

Does the FBAR only Include Bank Accounts?

No. The FBAR includes foreign bank and financial accounts. These other accounts may also include: Investment Accounts, Foreign Life Insurance, Stock Accounts, Provident Funds, Pensions and Retirement, and more.

What if the Account has Less than $10,000?

The threshold is not: “more than $10,000 per account.” 

Rather, the threshold is “an annual aggregate total of more than $10,000 in all foreign accounts.” Therefore, if you have 10 accounts with $1,500 in each account – you still report all 10 accounts, even though none of them exceed $10,000.

Do I File the FBAR with my Tax Return?

Yes and No. The FBAR is due at the same time as your tax return (including extensions), but the FBAR is a separate form, filed electronically and directly on the FinCEN website.

*Some older versions of tax software may still generate the discontinue TD form.

Is FBAR the Same as FATCA?

No. The FBAR has been around for 50 years.

On the other hand, FATCA (Foreign Account Tax Compliance) is relatively new. FATCA involves the U.S. entering into IGA (Intergovernmental Agreements) with more than 110 countries. The agreements are “reciprocal” agreements, requiring each country to report account holder information to the other respective country.

More than 300,000 Foreign Financial Institutions that have agreed  to disclose U.S. Account Holder information to the IRS.

What if I Do not File the FBAR?

It depends — but :

  1. You should NEVER just start filing forward if you have prior year FBARs, and/or
  2. You should NEVER submit a Quiet Disclosure.

Both of these are illegal, and can land you in serious hot water with the IRS.

If this is your first year to file, then you should file timely and stay in compliance.

If you were required to file FBARS in prior years but did not actually file timely FBARs in previous years, then you should submit to one of the IRS tax amnesty/voluntary disclosure programs before the following:

  • The IRS examines you (on any tax issue), and you are disqualified from submitting;
  • The IRS increases the penalty; and/or
  • The IRS eliminates the program (even though OVDP was discontinued, you still have other legal options)

Non-Compliance with U.S. Tax Law

Whether it is because you did not you had to report foreign accounts, thought you were below the threshold for filing, did not realize non-bank accounts were required to be reported, and/or have other unreported income, accounts, investments or assets – we can help.

What Can You Do?

Presuming the money was from legal sources, your best options are either the Traditional IRS Voluntary Disclosure Program, or one of the Streamlined Offshore Disclosure Programs.

Golding & Golding, A PLC

We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.