Do You Have a Foreign Financial Account?
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
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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
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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.
Failure to file FBAR Penalties
There are very heavy penalties for failure to file FBAR. The following chart highlights the civil and criminal penalties that may be asserted for not complying with the FBAR reporting and recordkeeping requirements.
|
Violation |
Civil Penalties |
Criminal Penalties |
Comments |
| Negligent Violation |
Up to $500 |
N/A |
31 U.S.C.
§ 5321(a)(6)(A)
31 C.F.R. 103.57(h) |
| Non-Willful Violation |
Up to $10,000 for each negligent violation |
N/A |
31 U.S.C. § 5321(a)(5)(B) |
| Pattern of Negligent Activity |
In addition to penalty under § 5321(a)(6)(A)
with respect to any such violation, not more than $50,000 |
N/A |
31 U.S.C. 5321(a)(6)(B) |
| Willful - Failure to File FBAR or retain records of account |
Up to the greater of $100,000, or 50 percent of the amount in the account at the time of the violation. |
Up to $250,000 or 5 years or both |
31 U.S.C. § 5321(a)(5)(C)
31 U.S.C. § 5322(a)
and 31 C.F.R. § 103.59(b) for criminal.
The penalty applies to all U.S. persons. |
| Willful - Failure to File FBAR or retain records of account while violating certain other laws |
Up to the greater of $100,000, or 50 percent of the amount in the account at the time of the violation. |
Up to $500,000 or 10 years or both |
31 U.S.C. § 5322(b) and 31 C.F.R. § 103.59(c) for criminal
The penalty applies to all U.S. persons. |
| Knowingly and Willfully Filing False FBAR |
Up to the greater of $100,000, or 50 percent of the amount in the account at the time of the violation. |
$10,000 or 5 years or both |
18 U.S.C. § 1001,
31 C.F.R. § 103.59(d) for criminal. The penalty applies to all U.S. persons. |
| Civil and Criminal Penalties may be imposed together. 31 U.S.C. § 5321(d). |
Which Exchange Rate to use to report accounts in foreign currency
You may use average exchange rates published by IRS at following URL on IRS.gov website.
http://www.irs.gov/businesses/small/international/article/0,,id=206089,00.html
Filing Deadline
Filing Deadline is on June 30th and no extension is allowed. Your report must be received by Detroit, MI office on or before June 30th. Keep in mind that Tax returns are postmarked on April 15th but FBAR report has to be received by June 30th which makes mailing deadline for FBAR a few days earlier than the June 30th.
If you have not filed FBAR yet then act fast!!!.
How FBAR is filed?
Send completed form(s) TD F 90-22.1 to Department of Treasury:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is used, send completed forms to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mailroom, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
The contact phone number for the delivery messenger service is 313-234-1062. The number cannot be used to confirm that your FBAR was received.
The FBAR is not to be filed with the filer's Federal tax return.
How can we help?
Our help will include following activities to help you in filing FBAR:
- Analyze your situation based on the Department of Treasury's filing requirements.
- Answer any question you may have.
- Gather filing information from your bank of statements or information.
- Fill FBAR form based on information you provide.
- Email or Mail forms to you to sign and file with Department of Treasury.
We charge a minimum fee which includes filing for one financial institute. Additional Financial Institute Accounts are charged based on number of accounts.
