Understanding the Foreign Bank Account Report (FBAR)
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Any citizen or resident of the United States with financial interest in any authority, including signature authority over one or more financial accounts in a foreign country, is required to report them to the IRS. Filing a report is required only if the total value of all accounts exceeds $10,000 at any time during the calendar year. Taxpayers may use IRS Form TD F 90-22.1 for reporting purposes.
The last date to file a Foreign Bank Account Report (FBAR) is June 30th. Requests for an extension cannot be made, but amendments can be made to correct errors in a report. If taxpayers do not have all the information required to complete the form, they should still file with the information they have, and then file an amended report to the IRS once they gather the information.
The IRS revised the FBAR to make it simpler by requiring only domestic partnerships, domestic corporations, and domestic estates or trusts to report their finances and assets in foreign countries.
Penalty for Non-Compliance
If an FBAR report is not filed by qualifying citizens or residents of the U.S., they may face civil penalties, criminal penalties, or both. If previous years’ filings haven’t been completed, the IRS will require a reason for the delay in filing, and if it is determined that the late-filing was due to a "reasonable cause," may remove the penalties.
Taxpayers can use Form TD F 90-22.1 to report to the IRS or they may fill:
- Boxes 7a and 7b on Form 1040 Schedule B
- Box 3 on Form 1040
- Box 10 on Form 1065 Schedule B
- Box 6a and 6b on Form 1120 Schedule N
FBAR forms can be downloaded in PDF format and printed from the IRS website irs.gov. The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, also accepts electronic filing of Form TD F 90-22.1. Taxpayers must not file an FBAR with their federal tax return.
Taxpayers can fill out and submit their FBAR form online through FinCEN’s web page: http://bsaefiling.fincen.treas.gov/Enroll_Individual.html
If taxpayers have any queries regarding the filing of their FBAR, they may call the IRS at 800-829-3676 or email them at FBARquestions@irs.gov.
Even though e-filing a report is preferable as it is fast, convenient and secure, taxpayers that paper file the report may send it to:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
Acknowledgement of Filing
The IRS does not send any confirmation that they received the FBAR report. Taxpayers may request verification after 90 days of filing the report by calling the IRS at 866-270-0733 and selecting option 1. If filers file the report through FinCEN, they will receive confirmation once filed.