An FBAR is a Report of Foreign Bank and Financial Accounts. It is the IRS requirements for U.S. citizens and residents who own – or have signature authority over – financial accounts outside of the country. This includes foreign branches of banks headquartered in the U.S. The reporting threshold is $10,000 for all foreign accounts at any time during the year. FBAR requirements call for reports on financial accounts such as:
The penalties for not following mandatory FBAR regulations can be severe. If the failure to file isn’t willful, the penalty can reach $10,000, unless it was due to reasonable cause.
If willful, the penalty can reach $100,000 or 50% of the total account balances – whichever is greater. You may also face criminal penalties.
If you aren’t sure whether you should file FinCEN Report 114, consult with H&R Block.
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