Any U.S. person with a financial interest in or authority over foreign financial accounts may be required to file a Report of Foreign Bank and Financial Accounts (FBAR). An FBAR is required if the aggregate value of the accounts exceeds $10,000 at any time during the calendar year. FBARs are due April 15 of the following calendar year, though an automatic extension is allowed.
For purposes of FBAR requirements, here are the definitions of some key terms:
U.S. person
This includes U.S. individuals (adults or children), resident aliens, and specific entities, such as corporations, partnerships, trusts and limited liability companies.
Foreign financial account
An account is considered foreign if maintained in a bank outside the United States, even if the institution is a U.S. bank.
Financial interest
A U.S. person has a financial interest in a foreign financial account if he, she or it is the owner of record or holder of legal title, even if the account is for the benefit of another person. Financial interest may also exist if the owner of record or holder of legal title is one of several entities controlled by or on behalf of a U.S. person.
The FBAR rules can be complex, and penalties for noncompliance can be significant. Contact us with questions.
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