The Bank Secrecy Act requires taxpayers to report foreign bank accounts, brokerage accounts and mutual funds, to the Treasury Department. Taxpayers report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR).
Who Must File
A U.S. person, corporation, partnership, limited liability company, trust and estate, must file a FBAR to report a financial interest in or signature or other authority over at least one financial account located outside the United States if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
Whether the account produced taxable income has no effect on whether the account is a foreign financial account for FBAR reporting purposes.
No FBAR filing is required for foreign financial accounts that are:
Owned by an international financial institution.
Maintained on a U.S. military banking facility.
Held in an individual retirement account (IRA) of which you’re an owner or beneficiary.
Held in a retirement plan of which you’re a participant or beneficiary.
Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.
Accounts between Correspondent banks.
Accounts owned by a government entities.
When to File
The FBAR is an annual report, due April 15 following the calendar year reported. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15.
How to File
You must file the FBAR electronically through FinCEN’s BSA E-Filing System. You don’t file the FBAR with your federal tax return.
For each account you must report on an FBAR, you should keep the following records for 5 years:
Name and address of the foreign bank.
Type of account.
Maximum value during the reporting year.
Filing a FBAR late or not at all may subject you to severe civil penalties and/or criminal charges.