If you are the account holder or have signature authority over any foreign bank account account (this includes checking or savings accounts, mutual funds, brokerage accounts, unit trusts, and other types of foreign financial assets), it may be possible that you are required to report the account yearly to the United States Department of Treasury. Under the Bank Secrecy Act, each United States person must file a Foreign Bank Accounts Report (FBAR), or FinCEN Form 114 if the combined total of your foreign financial accounts is at least $10K or reaches this threshold at any point during the calendar year.
FinCEN Form 114 is a requirement for all US Citizens with foreign bank accounts, and failure to file this form may result in stiff penalties, including punitive financial fees and criminal prosecution.
Many US Expats are asking how the United States government will know if certain foreign financial assets aren’t being reported. The answer is: In response to FATCA guidelines that have been developing over the course of the previous four years, the United States has entered into information sharing agreements with 39 countries and is in the final stages of finalizing information sharing agreements with 62 more.
Through these information sharing agreements, participating Foreign Financial Institutions (FFIs) are required to report certain details on accounts held by US Citizens. Participating FFIs have already registered with the United States and are now scheduled to share foreign bank account information including: Name(s) on each bank account; Social Security Numbers or TINs (Tax Identification Numbers) of the account holders; account numbers; balances (both high balance and end of year balance); and any gross dividends, interest payments, or any other financial credits applied to each foreign financial account.
FinCEN Form 114 can only be filed online; it has nothing to do with your US expat tax return. If you have been granted a filing extension by the IRS for your US expat tax return, this filing extension does not extend to FinCEN Form 114. You may not request an extension for filing FinCEN Form 114. FinCEN Form 114must be filed online with the United States Department of Treasury on or before June 30 of the following year.
For the purpose of filing FATCA Form 8938, the term ‘foreign assets’ includes more than your financial accounts. You must report all gains and losses incurred from your assets abroad, including private equity and foreign hedge funds, foreign stock, partnership interests, and any other income-producing asset.
Unlike FinCEN Form 114, FATCA Form 8938 is filed with your US tax return to the IRS.
A "financial account" includes any bank, securities, securities derivatives or other financial instruments accounts. The term includes any savings, checking, deposit or any other account maintained with a financial institution.
Financial account also generally includes any accounts in which the assets are held in a commingled fund, and the account owner holds an equity interest in the fund (such as mutual funds).
Individual bonds, notes, or stock certificates held by the filer are not a financial account nor is a loan (such as account in which you owe money to the bank).
Yes. An account with a financial institution that is located in a foreign country is a financial account for FBAR purposes whether the account holds cash or non-monetary assets.
The maximum value of account is the largest amount (not the average amount) of currency and nonmonetary assets that appear on any quarterly or more frequent account statements issued for the applicable year. If periodic account statements are not issued, the maximum account value is the largest amount of currency or nonmonetary assets in the account at any time during the year. Convert foreign currency by using the official exchange rate at the end of the year.
Though the FBAR instructions direct filers to use the official exchange rate, the Internal Revenue Service has no official exchange rate and generally accepts any posted exchange rate that is used consistently. For exchange rates, check the U.S. Treasury Web site or other commercial sites.
Even though no single account is over $10,000, because the aggregate value of accounts A, B and C is over $10,000, the person has to file an FBAR and must report foreign financial accounts A, B and C on the FBAR.
Yes, an FBAR must be filed whether or not the foreign account generates any income.
No, an FBAR is not required because the person has no power of disposition of money or other property in the account.
Yes, if any owner directly or indirectly owns more than 50 percent of the total value of the shares of stock, that owner will have to file an FBAR.
If the filer holds a financial interest in more than 25 accounts, check the yes box in item 14 and indicate the number of accounts in the space provided. Do not complete any further items in Part II or Part III of the report. Sign the form in item 44/45 and enter the date signed in item 46. Any person who lists more than 25 accounts in item 14 must provide all the information called for in Part II and Part III when requested by the Department of the Treasury.
Accounts in U.S. military banking facilities, operated by a United States financial institution to serve U.S. government installations abroad, are not considered as accounts in a foreign country. For this reason, these accounts do not have to be reported on an FBAR.
An officer or employee of a bank that is subject to the supervision of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Office of Thrift Supervision, or the Federal Deposit Insurance Corporation need not report that he has signature or other authority over a foreign bank, securities or other financial account maintained by the bank, if the officer or employee has NO personal financial interest in the account.
An officer or employee of a domestic corporation whose equity securities are listed on a national securities exchange or which has assets exceeding $10 million and 500 or more shareholders of record, need not file a report concerning signature authority over a foreign financial account of the corporation, if he has NO personal financial interest in the account and he has been advised, in writing, by the chief financial officer of the corporation that the corporation has filed a current report, which includes that account.