FBAR Filing Reminder - October 15th
Updated: Jun 18, 2020
An often overlooked filing obligation for US taxpayers is the annual Report of Foreign Bank and Financial Accounts filing commonly known as an FBAR. Under the Federal Bank Secrecy Act, certain individuals must report financial account information such as bank or brokerage accounts. Substantial penalties can arise if a required FBAR is not timely filed. If you have a foreign bank account or control another entity's foreign bank account, or you fear you may have triggered the FBAR penalties and would like to learn if there is an FBAR amnesty program, read on to learn more.
What is an FBAR?
As mentioned above, the Bank Secrecy Act requires reporting certain bank account or other financial account information to the US Treasury Department. The FBAR is the form that is used to report this information. The actual FBAR form is the FinCEN Form 114.
Who Must File an FBAR?
An FBAR filing is required for anyone who has an interest in, or signature or other authority over foreign financial accounts that had an aggregate value in excess of $10,000 at any time during the calendar year. For the 2019 year, FBAR filings are due on July 15th, but the government provides for an automatic extension until October 15, 2020. The FBAR filing is separate from other necessary tax returns like income or estate tax returns.
What Should You Do if You Must File an FBAR?
Taxpayers should not wait until the last minute to determine if a filing is necessary and then gather the information required to file the form. A careful analysis of account balances throughout the year is required because the threshold is any date during the year, not just the beginning or ending date, or average during the year. The penalties for failure to file are severe relative to the cost of filing the form, but the US Treasury is very serious about combating tax evasion using overseas accounts and this is one tool to ensure that all foreign assets of US taxpayers are reported. If you have questions about FBAR filings, contact Steiger Tax Law, a Michigan based tax law firm, for a free consultation to review your filing obligations.