The Report of Foreign Bank and Financial Accounts or FBAR is a requirement by the US Treasury Department. It is required of all US persons and entities, including citizens, residents, partnerships, corporations, LLCs, trust funds, etc., who hold accounts or authority (such as signatory authority) in financial statements outside the United States. An account in a financial institution outside of the United States which has at any time during the calendar year exceeded $10,000 in value qualifies for FBAR filing. Foreign bank accounts, securities, and financial instruments all come under this requirement and must be disclosed.
The FBAR filing is due for the preceding calendar year by April 15th. The government offers an automatic extension up to the 15th of October, and there is no formal requirement to file for this extension. Other exemptions to the rule can come into play in special situations such as natural disasters. In these cases, an extension is granted, and deadlines are extended. These new deadlines are updated on the relevant national websites like the FinCENs website and can be found under FBAR Relief notices.
One is required to file FBAR electronically, and a special request for exemption from efiling should be made for paper filing. One can call FinCENs resource center to make such a request. The general norm for filing is electronically through FinCENs BSA E-Filing System. It is to be noted that one does not file FBAR along with Federal taxes, and it is done separately. The filing must be done using FinCENs form 114. It is also possible to authorize a person to file FBAR on one’s behalf using the FinCEN Report 114a form. Another essential point to remember is the importance of keeping the correct records. Name of the foreign account, account number, name and address of the foreign bank, type of account, and the maximum value during the year are essential records one must maintain.
The basic information on who is required to file FBAR, when it is due, and how it is done has been covered in this article.