FOREIGN BANK ACCOUNT REPORT – FBAR
US persons who hold bank accounts outside the US or who have foreign account accounts must generally submit an FBAR form to the US Treasury Department each year, provided that the sum of the account balances of all accounts exceeds USD 10,000.
The definition of US persons in this context includes US citizens and green card owners, US-based companies, US foundations, and US estates.
The following account types and contracts must be declared on the FBAR form: checking accounts, savings accounts, securities accounts, certain insurance policies and pension plans, and other account types.
FBAR INFORMATION FOR SUBMISSION
The FBAR form is not part of the US tax return. While the US tax return is filed with the US tax authority, the FBAR form is filed with a US Treasury Department at the Financial Crimes Enforcement Network (FinCEN).
The submission of the FBAR form must be done electronically.
The deadline for submission of the FBAR was until June 30th. For the tax year 2016 the deadline was changed for a long time and the deadline of the FBAR coincides with the filing date of the US tax return.
PENALTIES
For non-submitted, incomplete or incorrectly filled FBAR forms, a penalty of up to USD 10,000 may be imposed, unless the violation has occurred intentionally. For deliberate violations, the penalty is USD 100,000 or 50% of the account balance at the time of the violation.
FBAR SUBMISSION TIME MISSED – WHAT NOW?
A penalty payment for FBARs not filed within the time limit is not levied as long as all the income (such as interest, dividends, etc.) accruing to the undeclared bank account has been fully declared on the tax return and the tax liability resulting from these income has been settled. Another condition for impunity is that the US Treasury has not yet been attracted to you and has not contacted you yet. Together with the FBAR form, you must provide a statement explaining why you did not meet your FBAR filing deadline.
If you have filed the FBAR in due time, but have mistakenly declared the account balance incorrectly, or have forgotten an account, you can submit a corrected FBAR. If you are unsure whether you have entered your accounts correctly and correctly, we will be glad to help you. Feel free to contact us.