Report of Foreign Bank and Financial Accounts (FBAR )

Foreign bank accounts must be reported to the IRS if a taxpayer has any financial interest, signature or other authority over a bank, securities, or other financial account and the value of all accounts reached $10,000 or more at any time during the year.


FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) must be filed when the FBAR filing requirements are met.


The FBAR is required under Title 31, of the Code of Laws of the United States of America, not under any provision of the Internal Revenue Service Code. Its reporting requirements initiated with the Bank Secrecy Act of 1970 under 31 U.S.C.


The law was originally passed to pursue organized criminals, drug dealers, money launderers and tax evaders.  Following 9/11, congress broadened the purpose and the enforcement of the filing of the FBAR.  In 2003, The U.S. Treasury Department transferred the administration of the FBAR to the Internal Revenue Service.  Since then, The IRS has prioritized the enforcement of filing the FBAR for the importance of the FBAR to track down tax evasion through foreign bank accounts.


Filing Date

The FBAR must be filed on or before April 15th of the year following the calendar year being reported. The FBAR must be filed electronically through FinCEN’s BSA E-Filing System.


The FBAR filing deadline will follow the Federal income tax due date guidance, which notes that when the Federal income tax due date falls on a Saturday, Sunday, or legal holiday, a return is considered timely filed if filed on the next succeeding day that is not a Saturday, Sunday, or legal holiday.


Extension of Time to File. FinCEN will grant filers failing to meet the FBAR annual due date of April 15th an automatic extension to October 15th each year. Accordingly, specific requests for an extension are not required.


Penalties for Failure to File the FBAR

Failure the file the Report of Foreign Bank and Financial Accounts by the due day may result in civil penalties and criminal penalties or both if the filer does not have a reasonable cause why the forms were filed late.  The IRS recommend that if you learn you were required to file FBARs for earlier years to file the delinquent FBAR reports as soon as possible and attach a statement explaining why the reports are filed late.

  1. Penalty for failure to properly file the FBAR may be up $10,000 per violation.
  2. Penalty for willfully failing to file the FBAR is the greater of $100,000 or 50% of the balance in the account. Also, the person who willfully fails to file the FBAR may be subject to criminal prosecution.
Types of Foreign Assets and Whether They are Reportable
Financial (deposit and custodia) accounts held at foreign financial institutions Yes
Financial account held at a foreign branch of a U.S financial institution Yes
Financial account held at a U.S. branch of a U.S branch of a foreign financial institution No
Foreign financial account for which you have signature authority Yes, subject to exceptions
Foreign stock or securities held in a financial account at a foreign financial institution The account itself is subject to reporting, but the contents of the account do not have to be separately reported
Foreign stock or securities not held in a financial account No
Foreign partnership interests No
Indirect interests in foreign financial assets through an entity Yes, if sufficient ownership or beneficial interest. (i.i., a greater than 50 percent interest) in the entity. See instructions for further detail.
Foreign mutual funds Yes
Domestic mutual fund investing in foreign stocks and securities No
Foreign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor Yes, as to foreign accounts
Foreign-issued life insurance or annuality contract with a cash-value Yes
Foreign hedge funds and foreign private equity funds No
Foreign real estate held directly No
Foreign real estate held through a foreign entity No
Foreign currency held directly No
Precious Metals held directly No
Personal property, held directly, such as art, antiques, jewelry, cars and other collectibles. No
‘Social Security’ – type program benefits provided by a foreign government No