A “U.S. person” is required to file an FBAR if the aggregate maximum value of all foreign financial accounts exceeds $10,000 at any time during the calendar year reported.
What to Report ?
Reportable accounts include, but are not limited to:
- Bank accounts (checking, savings, CDs)
- Brokerage and investment accounts
- Mutual funds or similar pooled funds
- Foreign retirement accounts
- Cash-value life insurance or annuity contracts
Deadline: The FBAR is due by April 15 of the year following the calendar year being reported, to coincide with the tax return deadline. An automatic six-month extension to October 15 is granted if the initial deadline is missed; you do not need to request this extension.
Penalty for violation
- Non-willful violation – $10,000 per violation
- Willful violation- greater of $100,000 or 50% of the balance in the account at the time of the violation
*Adjusted for inflation – see the latest rates for the applicable year.
Streamlined filing compliance procedures: The U.S. taxpayers who failed to report foreign financial assets and pay all tax due in regard of those assets and this did not result from a willful conduct on their part.
SFOP/SDOP – Streamlined procedures for both non-U.S. residents (Streamlined foreign offshore procedures) and U.S. residents (“streamlined domestic offshore procedures”) are as below:
Taxpayers must certify that conduct was not willful.
This applies also for FBARs (FinCEN form 114).
Non-willful conduct is conduct that is due to negligence, carelessness, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.
Attention: If IRS has initiated a civil examination of taxpayers’ return for any taxable year, regardless of the examination relating to undisclosed foreign financial assets, the tax payer will not be eligible for this scheme of procedures.
A valid Taxpayer identification number – TIN (SSN/ITIN in case of individual) is required to participate in the streamlined procedures.
General treatment:
- Tax returns submitted under the streamlined procedures will be processed like any other return (considered as any other regular return).
- The receipts of the return will not be acknowledged by the IRS.
- These returns will not be subject to IRS audit automatically.
- They mage be subject to verification procedures, to check the accuracy and completeness of submissions against the information received from banks, financial advisors etc.