What You Need to Know About FBAR
Most US-based organizations — and many US citizens and residents — with one or more financial accounts located outside the country must file an FBAR with the US Department of Treasury on or before June 30 every year. This is a brief summary of the requirement.
What is FBAR?
FBAR is the Report of Foreign Bank and Financial Accounts, a report that must be filed each year by certain US entities (such as corporations, partnerships or LLCs), citizens and residents, known collectively as “US persons.” FBARs must be electronically filed to the US Department of Treasury using the FinCEN Report 114, which replaces the old FBAR form TD F 90-22.1.
Who Must File an FBAR?
Any US person (including US entities) with financial interest in or signature authority over at least one financial account located outside the US must file an FBAR if the aggregate value of all accounts exceeded $10,000 at any time during the calendar year reported. You may have to file even if the foreign account produced no taxable income. Note that FBARs must be filed for CFOs and controllers with signature authority over bank accounts outside the US. As long as the person in the company has signatory authority on a foreign bank account, they must file. (There are certain limited exceptions to the FBAR reporting requirement.)
What’s the FBAR Filing Deadline?
FBARs must be filed on or before June 30 of the year following the calendar year that is being reported on.
Can I Extend the FBAR Filing Deadline?
No, there is no mechanism for extending the annual FBAR deadline. The FBAR is not part of a US person’s federal tax return, and any IRS extensions granted to a federal tax return do not affect the FBAR filing deadline.
Are there Penalties for Missing the Deadline?
Yes. Non-willful noncompliance with FBAR can result in penalties of up to $10,000. If deemed willful, those penalties can reach $100,000 or up to 50% of account balances, whichever is greater. Criminal penalties can also result from a failure to report.
For more information on how to comply with FBAR filing requirements, contact us.