Foreign Bank and Financial Accounts (FBAR) (FinCEN) 114

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1
FBAR due date is aligned with individual tax return due date April 15 of the year following the year that the account holder meets the $10,000 threshold. You can seek a 6 month extension to file your FBAR forms if needed.
A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income.

Frequently Asked Questions (FAQ)

• Q. Who Must File an FBAR?

  A. Any United States person who have 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 exceeded $10,000 at any time during the calendar year to be reported to IRS by filing FBAR.

• Q. Who is a United States Person?

  A. United States person includes a citizen or resident of the United States, a domestic partnership, a domestic corporation, and a domestic estate or trust.

• Q. Can I file for FBAR extension?

  A. Yes

• Q. What happens if an account holder is required to file an FBAR and fails to do so?

  A. Failure to file an FBAR when required to do so may potentially result in civil penalties, criminal penalties or both. If you learn you were required to file FBARs for earlier years, you should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late. No penalty will be asserted if the IRS determines that the late filings were due to reasonable cause.

• Q. I am not a US Citizen or Green card holder do I have to file FBAR form 114?

  A. Yes as long as you meet the Substantial Presence Test. Keep in mind US Resident definition for tax purposes is different than that of the USCIS (United States Citizenship and Immigration Service).

• Q. What is Substantial Presence Test?

  A. You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for that calendar year To meet this test, you must be physically present in the United States on at least:
  i. 31 days in a Calendar year, and
  ii. 183 days during the 3-year period that includes current year and 2 previous years counting:
  All the days you were present in current year, and
  1/3 of the days you were present in previous year, and
  1/6 of the days you were present 2 years before

• Q. How do I file FBAR?

  A. It is mandatory to file FBAR electronically. E-filing is a quick and secure way for individuals to file FBARs.

• Q. Is a U.S. resident with power of attorney on his elderly parents’ accounts in a foreign country required to file an FBAR, even if the resident never exercised the power of attorney?

  A. Yes, if the power of attorney gives the U.S. resident signature authority, or other authority comparable to signature authority, over the financial accounts. Whether or not such authority is ever exercised is irrelevant to the FBAR filing requirement.

• Q. Does more than one form need to be filed for a husband and wife owning a joint account?

  A. No, provided that the names and Social Security numbers of the joint owners are fully disclosed on the filed FBAR. It should be noted that if the filer's spouse has a financial interest in other accounts that are not jointly owned with the filer or has signature or other authority over other accounts, the filer's spouse should file a separate report for all accounts including those owned jointly with the other spouse.

• Q. A person owns foreign financial accounts A, B and C with account balances of $3,000, $1,000 and $8,000, respectively. Does the person have to file an FBAR and if so, which accounts must be listed on the FBAR?

  A. Even though no single account is over $10,000, because the aggregate value of accounts A, B and C is over $10,000, the person has to file an FBAR and must report foreign financial accounts A, B and C on the FBAR.