What is the FBAR?

The Foreign Bank Account Report (FBAR), formally FinCEN Form 114, is one of the most important international compliance requirements for US persons with foreign financial accounts. Many Americans — especially those living abroad — are unaware of this obligation until it's too late.

Who Must File?

Any US person — including citizens, resident aliens, trusts, estates, and domestic entities — who has a financial interest in or signature authority over one or more foreign financial accounts must file an FBAR if the aggregate value exceeded $10,000 at any point during the calendar year.

This includes:

• US citizens living abroad
• Americans with foreign investment accounts
• US persons with signature authority over employer's foreign accounts
• US entities with foreign bank accounts

The $10,000 Threshold

The threshold is aggregate — not per account. If you have three accounts worth $4,000, $3,500, and $3,000, you must file an FBAR because the total ($10,500) exceeded $10,000.

Penalties for Non-Compliance

FBAR penalties are among the most severe in the tax code:

• Non-willful violation: Up to $10,000 per violation per year
• Willful violation: The greater of $100,000 or 50% of the account balance per violation per year
• Criminal penalties: Up to $250,000 and 5 years imprisonment for willful violations

Filing Deadline

The FBAR is due April 15, with an automatic extension to October 15. Unlike tax returns, no extension request is needed.

How to Come Into Compliance

If you have unfiled FBARs, you may qualify for the IRS Streamlined Filing Compliance Procedures, which offer reduced or eliminated penalties for non-willful violations. Contact me to discuss your options.