IRS Issues Guidance On FBAR: LB&I FBAR Practice Unit

The Bank Secrecy Act (“BSA”) requires a person to file a Report of Foreign Bank and Financial Accounts (“FBAR”), Financial Crimes Enforcement Network (“FinCEN”) Report 114, when that person has a financial interest in, or signature or other authority over,  at least one foreign financial account and the aggregate value of all foreign financial accounts exceeds $10,000.  While often mistaken for a “tax” form, the FBAR is not technically a tax form.  Although the FBAR filing requirement has been around since the 1970s, the Federal Government has significantly stepped up enforcement—and penalty assessment—in more recent years.

FinCEN requires a FBAR filing when the aggregate balance amount of a person’s foreign financial account(s) totals more than $10,000 at any point during the year. A person must list the maximum amount in each account for the year when filing the FBAR. It is irrelevant whether a person has one or ten foreign financial accounts. If the aggregate balance in those accounts exceeds $10,000 at any point during the year, if only for one day, then a FBAR must be filed the following year. The due date for the FBAR for 2016 is April 15, 2017. For years prior to 2016, the due date was June 30 of the following year.

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