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FBAR - Frequently Asked Questions

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What is an FBAR?

Report of Foreign Bank and Financial Accounts (FBAR).

FBAR is used for declaration of assets. There is NO extra tax on the money you are declaring on FBAR.

A United States tax payer who has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. The FBAR is an annual report that must be electronically filed with the Department of Treasury on or before June 30 of the year following the calendar year being reported. There is no extension of time to file an FBAR.

Is there any deadline to file FBAR report?

Yes, FBAR Filing deadline is June 30th of the calendar year. There is no extension available after this date. Example : For year 2017 it would be 06/30/2017.

Who should file an FBAR?

You must file an FBAR if both of these are true:

You're a U.S. taxpayer.

You own or control foreign bank and financial accounts with a combined value over $10,000.

Do I need to file an FBAR for my infant son who is a U.S. citizen and has foreign financial accounts, but is not required to file a tax return?

Yes. There are no age limitations on FBAR filing. An FBAR should be filed on behalf of your son if he has reportable foreign financial accounts. Remember - tax filing status is not a consideration for FBAR.

Can I file FBAR for prior years that I missed?

Yes, a delinquent FBAR can be filed for prior years starting from year 2008.

I usually transfer funds to my accounts and immediately afterwards funds get paid to my parents or family for their maintenance or buying property, do I need to file?

It does not matter why you transfer the funds, If at any time, you have the balance of $10,000, you need to file FBAR. if you transfer more than $14,000 to any one, you are subject to gift tax. Sending money to Parents or Family members has more implications than you transfer to your own accounts.

How If I pretend that I was not aware of this report?

Ignorance of law is no excuse.

FBAR Penalties

Civil penalties for failing to file an FBAR can be significant. The IRS can impose a $10,000 penalty for each non-willful violation of the FBAR filing requirement. Where a person willfully fails to file an FBAR, the IRS may impose a penalty equal to the greater of $100,000 or 50 percent of the account's highest balance. In addition, criminal penalties for a willful failure to file can reach $250,000, 5 years in prison or both. Civil and criminal FBAR penalties may be imposed together. Generally, as a matter of law, the IRS has six years to assert an FBAR penalty.

An individual has the power to direct how an account is invested, but cannot make dispositions from the account. Is that individual required to file the FBAR?

No. The FBAR is not required because the person who cannot make dispositions from an account is not considered to have signature authority over the account.

Is an account holding certificates representing an interest in gold bullion considered a reportable account?

Yes. An account with a financial institution, located in a foreign country, is a reportable account, whether the account holds cash or nonmonetary assets.