Who Must File an Foreign Bank Account Report (FBAR)
Many foreigners living overseas are not aware that they have to file an annual report to the U.S. Treasury (not IRS) if they have more that $10,000 in overseas accounts. United States persons are required to file an FBAR if:
*** The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States
***The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
The FBAR is not filed with the filer’s federal income tax return. The granting, by the IRS, of an extension to file federal income tax returns does not extend the due date for filing an FBAR. You may not request an extension for filing the FBAR. The FBAR must be received by the IRS on or before June 30 of the year following the calendar year being reported. File by mailing the FBAR to:
United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621.
The penalty can be steep if you don’t file it may cost you 40 to 70% of the funds in your overseas accounts plus attorney’s fees .
Download the form http://www.irs.gov/pub/irs-pdf/f90221.pdf
Excellent Wall Street Journal Article: http://online.wsj.com/article/SB10001424052748703643104576291003798203320.html
The new Foreign Account Tax Compliance Act (FACTA) seeks the require foreign banks to report the holdings of United States citizens, just in case those citizens “forget” to file their FBARS. More information on implementation of the FACTA in this Financial Times article: http://www.ft.com/intl/cms/s/0/fe2f7bae-ae49-11e0-844e-00144feabdc0.html#axzz1Rq1Sn91d