Report of Foreign Bank and Financial Accounts (FBAR)
If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, you may be required to report the account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial Accounts (FBAR), if
1. The person has a financial interest in, or signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country and
2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.
Who Must File an FBAR
United States Person: Refer to the definition of United States person found in the July 2000 version of the FBAR. Under this definition, the term United States person means (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.
The FBAR is not to be filed with the filers Federal income tax return. The FBAR is filed on Form T.D. F 90-22.1 and must be received by the IRS on or before June 30 of the following year.
Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.
Please contact your BCG&Co. advisor for more details orwith questions.
Find full details on the IRS website.
