If you have an interest in or signature authority over a financial account outside the U.S., you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) form with the U.S. Treasury Department by June 30. This form must be filed even if the account produces no income, and, unlike income tax returns, extensions are not available for untimely filings.
Disclosure requirements for foreign accounts were first imposed by the Bank Secrecy Act decades ago; however, enforcement has become far stricter in recent years. Penalties for failure to file an FBAR form can be harsh, with up to $10,000 in civil penalties for each violation, and the greater of $100,000 or 50% of the value of the account for a willful violation.
Who Must File:
All U.S. persons (including U.S. citizens, legal permanent residents, and U.S. corporations, partnerships, and trusts and estates) that have an ownership interest in or signature authority over foreign financial accounts with an aggregate value exceeding $10,000 must file IRS Form TD F 90-22.1. Foreign financial accounts include foreign bank accounts, brokerage accounts, mutual fund shares, insurance policies with a cash value, and annuities with a cash value. In general, you have an ownership interest in an account if you are the owner of record or if you have a greater than 50% interest in a partnership, corporation, trust, or other entity holding such account.
How To File
When To File
If submitting the FBAR form by mail, it must be received no later than June 30 – unlike federal tax returns, which need only be postmarked by the applicable deadline.
Unfiled Forms for Previous Years
If you have not complied with the FBAR filing requirements in previous years, contact our office or consult another tax attorney with respect to your options for disclosing the unreported information to the IRS.
If you have any questions about FBAR filing requirements or need assistance in completing the form, feel free to contact our office.