Reporting of Foreign Bank/Financial Accounts (FBAR)
Lately there have been a lot of talks, articles, emails and discussions about reporting of the foreign bank accounts; foreign assets etc. A lot of people seem to be getting notices from the federal govt, so I decided to summarize the requirement briefly for all my friends.
If you have a financial interest and/or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of financial accounts exceeding certain thresholds, the Bank Secrecy Act may requires you to report the account EVERY YEAR to the Treasury department.
Who Must File an FBAR:- United States persons (US citizens; US residents, Corporations, partnerships, LLC etc) are required to file an FBAR if:
- The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- The aggregate value of ALL foreign financial accounts together exceeded $10,000 at any time during the calendar year to be reported.
Reporting and Filing Information:- A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. You may not request an extension for filing the FBAR. The FBAR must be received by the IRS on or before June 30 of the year following the calendar year being reported.
Penalties for Not Filing: – The Treasury Department may impose stiff penalties for failing to file the FBAR reports. A person required to file an FBAR who fails to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10K per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100K or 50% of the balance in the account at the time of the violation, for each violation
Let me know if you need any help in this regard, please see the link below for additional details: