Are You Required to File an FBAR?

United States persons, including citizens, residents, corporations, partnerships, limited liability companies, trusts, and estates are required to report foreign bank and financial accounts annually to the U.S. government using FinCen Form 114, Report of Foreign Banks and Financial Accounts, (often referred to as the FBAR) and are required to pay U.S. tax on the income of those foreign accounts as appropriate.

You are Required to File a Yearly FBAR if:

1. You have a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year.

Types of Foreign Assets Reportable:

• Bank accounts held at a foreign financial institution
• Bank accounts held at a foreign branch of a U.S. financial institution
• Securities accounts
• Commodity futures or options accounts
• Insurance policies with a cash value
• Mutual funds or similar pooled funds
• Indirect interests in foreign financial assets through an entity

When to File?

The FBAR is an annual report, due April 15 following the calendar year of reporting. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual filing date of April 15. You don’t need to request an extension to file the FBAR by the extended due date.

What Happens if I File My FBAR Late?

Filing an FBAR late or not at all is a violation and may subject you to civil monetary and/or criminal penalties. Civil penalty maximums are adjusted annually for inflation. Current maximums are as follows:

• Up to a $12,921 civil penalty per “non-willful” violation
• Up to the greater of $129,210 or 50% of the amount in the account at the time of violation for “willful” violations

Time is of the essence when dealing with a delinquent FBAR. If you have not been contacted by IRS about a late FBAR and are not under civil or criminal investigation by IRS, you may file late FBARs and, to keep potential penalties to a minimum, should do so as soon as possible.

There are many factors that contribute to how the government perceives the severity of your FBAR delinquency, and we can provide clarity and assist with resolution for your FBAR concerns. Contact a Boulay advisor at 952.893.9320 or learnmore@boulaygroup.com.