Do You Need to File a Foreign Bank (Or Securities) Account Report?
U.S. persons (including businesses) are required to file an Foreign Bank Account Report (FBAR) if:
(1) the U.S. person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
(2) the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year.
The FBAR is due April 15, however, automatic extensions are granted to October 15.
Civil penalties for a non-willful violation can range up to $12,921 ($10k is now inflation indexed) per violation, and civil penalties for a willful violation can range up to the greater of $129,210 or 50% of the amount in the account at the time of the violation.
Penalties can be huge. In 2018, the Supreme Court declined to review a lower court’s ruling imposing a $1 million FBAR penalty [U.S. v. Bussell, (CA 9 10/25/2017)]
Besides FBAR reporting with the U.S. Treasury, taxpayers may also be subject to specified foreign asset reporting with the IRS.
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