Do Children File FBAR: Minor Children & Foreign Accounts

Do Children File FBAR: Minor Children & Foreign Accounts

Do Children File FBAR?

Do Children File FBAR? As stupid as the answer may seem, minor children with foreign accounts still have to file an annual FBAR – even if they do not have to file a tax return. So while there are age restrictions for movies, amusement parks, and other kid-related activities – the FBAR does not have any exception for minor children. Therefore, if your child has ownership or signature authority over a foreign account, then they have to file their own FBAR each year to report the account(s) on FinCEN Form 114. It is important to note that even if the child is not required to file a tax return and/or the parents are filing tax return on the children’s behalf to report if there is more than the excludable amount — children with foreign accounts still must file the FBAR.

Minor Children & Foreign Accounts: Common Scenarios

Here are some of the more common minor child foreign accounts that must be reported on an annual FBAR:

Overseas Minor’s Account

A minor’s account is a common type of foreign account that leads to FBAR filing for minor children. In many foreign countries, parents will open an account on behalf of their child, and under their child’s name — even though the child may not be able to access the money until they reach a certain age. These accounts are typically reported on the FBAR. And, if the adult has signature authority or is otherwise identified on the account (aside from being a beneficiary under most circumstances) they are also required to report the account.

Foreign Life Insurance

In many countries, it is custom for parents to open a ULIP insurance policy under the name of their minor children, and on their behalf. In a common scenario, the parents will open a life insurance policy and fund it, with the idea that it will pay out at a future date once all the premiums are paid. This can also lead to FBAR filing for the minor child.

Even though the child is not making any contributions to the premiums, since the child is the owner of the insurance policy, they would generally include it on the FBAR.

Bank Account or Investment Accounts Abroad

If the child is identified as an owner, co-owner, or signatory on bank accounts, then they generally have to report these accounts on their own individual FBAR, if the threshold requirement is met.  As stated above, it is important to keep in mind that the child does not have to have actual ownership or access to the money at the current time, but if the account is under their name then they will have to report it.

In conclusion, the FBAR reporting requirements are far reaching. It requires minor children as well to report their foreign bank and financial accounts to FinCEN in any year that they meet the threshold requirements for reporting.

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