To obtain the Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1: Click here
Persons required to file the FBAR:
- US persons (including a Green Card holder, or individual who is treated as a US “resident” due to prolonged physical presence in the US pursuant to the US tax laws) who have ownership or control (for example, signature authority) of foreign accounts with an aggregate value of over $10,000 in the calendar year.
- Please note that a non-US individual, who merely makes a so-called 6013(g) election in order to file a joint tax return with their US spouse, is not treated as a US person for purposes of filing the FBAR.
Foreign (non-US) “Accounts” required to be disclosed:
- Bank, securities, financial instruments accounts
- Commodity futures or options accounts
- Accounts held in commingled funds (mutual funds) and the account holder holds an equity interest in the fund
- Foreign life insurance or annuities with cash surrender value
- Individually owned bonds, notes, stock certificates, and unsecured loans are not “accounts”
Many mistakes are made with FBAR filings, the most common being:
- Many persons are under the mistaken belief that if one has several overseas accounts and a particular account is not over $10,000 then that account does not have to be reported. This is incorrect. Remember if the highest aggregate value of all of the foreign accounts on any day in the tax year is over $10,000, then all accounts must be reported on the FBAR.
- Another common mistake arises when an account beneficially belongs to another person. In this case it is often erroneously believed that the nominee does not need to report that account on an FBAR. This is incorrect; the nominee must still file the FBAR if the dollar threshold is met by the nominee.
- Other mistakes involve an improper understanding about what must be disclosed on the FBAR – for example foreign mutual funds or foreign life insurance / foreign annuity with a cash surrender value.
Don’t Forget Schedule B
Even if you do not have enough dividend or interest income to require filing of Schedule B with your tax return, US taxpayers filing Form 1040 are required to check a box on Schedule B, Part III, indicating whether they have an interest in or signature authority over a financial account in a foreign country. Make sure this question and its follow-up are answered both accurately and completely.
- The FBAR form must be received by the Department of the Treasury no later than 30 June following the calendar year for which the interest in a foreign account is reported. Unlike with income tax returns, the date of mailing the FBAR is not the date governing timeliness of filing. The FBAR is not considered “filed” until it is actually received by the Department of the Treasury in Detroit, MI.
- The time to file the FBAR form may not be extended; therefore, 30 June is always the deadline regardless of whether the taxpayer’s income tax return is extended. The form is not submitted to the IRS, but instead must be mailed to a special address at the Department of the Treasury.
- File by mailing to: Department of the Treasury, Post Office Box 32621,Detroit, MI 48232-0621
- If an express delivery service is used, file by sending to: IRS Enterprise Computing Center, ATTN: CTR Operations Mailroom, 4th Floor, 985 Michigan Avenue, Detroit, MI 48226
- The FBAR may be hand delivered to any local office of the Internal Revenue Service for forwarding to the Department of the Treasury, Detroit, MI. The FBAR may also be delivered to the IRS’ tax attaches located in United States embassies and consulates for forwarding to the Department of the Treasury, Detroit, MI. Remember – the FBAR is not considered “filed” until it is actually received by the Department of the Treasury in Detroit, MI.
E-Filing Soon Mandatory
- E-filing of the FBAR is currently possible in very limited circumstances. The Financial Crimes Enforcement Network (FinCEN) can accept online FBAR filings only when one signature is required.
- Commencing July 1, 2013 FBARs must be filed online at the Banking Secrecy Act (BSA) E-Filing website.
- Do not simply use an Internet search engine to ascertain where to e-file your FBAR as these may lead you to third party online businesses offering FBAR e-filing services. It is recommended that you use the official Banking Secrecy Act website of the US Treasury, above. You will be required to complete a user application.
Other Important Points / Getting FBAR Help
- The FBAR form is not to be attached to any tax return. It must be filed (assuming the requisite conditions are met) even if the individual is not under an obligation to file an income tax return.
- Form 8938 Click here (PDF) is often referred to as the “shadow FBAR”. The Form 8938 DOES NOT replace the FBAR and it is required to be attached to the individual’s income tax return. Form 8938 is required when the total value of so-called “specified foreign assets” exceeds certain threshold amounts. For example, a married couple living in the US and filing a joint tax return must file Form 8938 if their total specified foreign assets exceed $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year. The filing thresholds for taxpayers who reside abroad are higher. Generally, a married couple residing abroad and filing a joint return are required to file Form 8938 if the value of specified foreign assets exceeds $400,000 on the last day of the tax year or more than $600,000 at any time during the year.
- IRS offers telephone assistance in completing the FBAR, available Monday – Friday, 8 a.m. to 4:30 p.m. Eastern Time, at (866) 270-0733 (toll-free inside the U.S.) or (313) 234-6146 (not toll-free, for callers outside the U.S.).
- Questions regarding the FBAR can be sent to the IRS at FBARquestions@irs.gov.