Report of Foreign Bank and Financial Accounts (FBARs)
Did you know you have to report foreign bank accounts with an excess of $10,000 USD in them?
That is exactly what the IRS is requiring you to do. Starting a few years ago, the IRS began to crack down on hiding money in foreign countries, most notably Switzerland, without paying tax on those funds. Since that happened a few years ago, the IRS had made a new form you need to file called TD F 90-22.1 Report of Foreign Bank and Financial Accounts, otherwise known as FBARs.
Who needs to File FBARs?
Generally, if you hold more than $10,000 USD or its equivalent in foreign currency in an overseas bank account, you are required to file this form. It is a detailed form that includes information about both the amount in your bank account as well as the bank’s name and account number.
What if my Corporation Owns the Bank Account, not me?
It doesn’t matter. The IRS states that anyone who controls a corporation or has signature authority over the bank account also needs to file an FBAR.
Does Real Estate Count Towards the $10,000?
No. Currently, the rules state that you are required to file if you have cash or cash like instruments, such as securities in a bank account, not real estate in excess of $10,000.
What’s the Point of All of This?
The IRS is attempting to help bring back overseas assets that have not been taxed.
What happens if I don’t file?
If you do not file, you can be subject to a civil penalty.
When do I need to file the FBAR?
Do not file the FBAR with your tax return. Instead, file the form separately by June 30th by mailing it to Department of the Treasury, Post Office Box 32621, Detroit, MI 48232-0621.
Do Any Exceptions Apply to Me?
Usually, most of the exceptions that apply are for individuals who have signature authority over the bank account, but no financial interest in the bank account, such as a corporate officer, AND the corporation is already required to submit financials to the U.S. government in some other way, such as an SEC report.
Where can I get more information?
You can find more information about FBARs from the IRS website below: