FBAR Filing & IRS Requirements Explained

FBAR Filing & IRS Requirements Explained

FBAR Filing Requirements & the IRS

FBAR Filing Requirements: As far as IRS International Information Reporting for foreign accounts, assets and investments goes, the FBAR is the bully of the bunch. In fact, the FBAR is not even a tax form, but rather a FinCEN Form. FinCEN is the Financial Crimes Enforcement Network, and the specific form is referred to as FinCEN Form 114.

In 2003, the Internal Revenue Service took over enforcement of the FBAR. Since then, the foreign account compliance initiative has become a key enforcement priority. International and offshore investigations are on the rise, along with the number of penalties issued for FBAR violations.

If you are already out of compliance, then before filing for the current year it is important to determine if you are were compliant in prior years as well.

Just filing forward for FBAR – before getting into compliance for prior years — is referred to as a Quiet Disclosure, and may result in even more penalties.

FBAR FAQ 

Here are some of the more common questions about FBAR Filing:

What is the FBAR (FinCEN Form 114)?

The FBAR is the FinCEN (Financial Crimes Enforcement Network) form that is used by U.S. Persons to report foreign bank and financial accounts.

While the FBAR is technically a FinCEN Form, it is enforced by the IRS.

What Accounts are Reported on the FBAR?

All different types of accounts are FBAR reportable.

The FBAR requires you report the majority of foreign bank and financial accounts.

It is important to note it is not limited to just bank accounts.

It may also include:

  • Investment Accounts
  • Pension Accounts
  • Stock Accounts
  • Life Insurance

What’s The FBAR Threshold for Filing 

If a Person has an annual aggregate total across all accounts (not per account total) that exceeds more than $10,000 on any given day of the year, the FBAR reporting rules kick-in and the form must be filed.

The +$10,000 is not a per account requirement, but rather +$10,000 in total for all accounts combined.

Who is Required to File FBAR?

Anyone who meets the +$10,000 threshold must file the FBAR.

One very confusing aspect of the FBAR, is that you have to file the form even if you are not required to file a tax return in the current year. 

It is an entirely separate reporting requirement.

A few common misconceptions to consider:

Do Individuals File FBAR?

Yes, Individuals file an annual FBAR.

Do Entities File FBAR?

Yep, entities file the FBAR too.

What About Minors, do they File FBAR?

Yes. There is no minor’s exception to filing the FBAR.

How about Trust and Estates, Do they File FBAR Too?

Yes, there is no exception for Trusts and Estates either.

What Day is the FBAR Deadline for File?

The FBAR is due in April, but is on automatic extension through October. (this may change in the future).

Where do I File FBAR?

Individuals can go to the FinCEN.org website, download the PDF, save it to their computer, and submit directly from the form itself.

FBAR Instructions Help

We know. We have prepared our own set of FBAR Instructions as 10-step guide to try to help you understand the requirements for filing.

What if I Missed the FBAR Deadline?

You should contact a Board-Certified Tax Law Specialist to assist you.

Beware of attorneys trying to scare you.

Always be careful of self-purported “FBAR Experts.”

What are the FBAR Penalties?

The FBAR Penalties range extensively.

Some people get away with a warning letter in lieu of penalties. Others can get hit with willfulness penalties, BUT most people are non-willful, and those penalties are more limited.

It is extremely rare for an FBAR violation to turn criminal.

How does IRS Know I Didn’t File FBAR?

The IRS has many different ways to find you.

Maybe someone else disclosed an account you own jointly with them, or already submitted to the FBAR Amnesty program.

More commonly, with the introduction of FATCA (Foreign Account Tax Compliance Act) more than 110 countries and 300,000 Foreign Financial Institutions are actively reporting U.S. persons with foreign account relationships.

What is FBAR Amnesty?

FBAR Amnesty is an approved method for safely getting into compliance.

Many taxpayers can reduce or even avoid penalties altogether.

Please beware of any tax professional that recommends a quiet disclosure — those are illegal and may result in an IRS Special Agent Investigation (read: not good)

We Specialize in FBAR & FATCA Offshore Voluntary Compliance

Our firm specializes exclusively in international tax, and specifically IRS offshore disclosure

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.

Each case is led by a Board-Certified Tax Law Specialist with 20-years experience, and the entire matter (tax and legal) is handled by our team, in-house.

*Please beware of copycat tax and law firms misleading the public about their credentials and experience.

Less than 1% of Tax Attorneys Nationwide Are Certified Specialists

Our lead attorney is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.

Recent Case Highlights

  • We represented a client in an 8-figure disclosure that spanned 7 countries.
  • We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
  • We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
  • We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
  • We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.

How to Hire Experienced Offshore Counsel?

Generally, experienced attorneys in this field will have the following credentials/experience:

  • 20-years experience as a practicing attorney
  • Extensive litigation, high-stakes audit and trial experience
  • Board Certified Tax Law Specialist credential
  • Master’s of Tax Law (LL.M.)
  • Dually Licensed as an EA (Enrolled Agent) or CPA

Interested in Learning More about our Firm?

No matter where in the world you reside, our international tax team can get you IRS offshore compliant.

We specialize in FBAR and FATCA. Contact our firm today for assistance with getting compliant.


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