May 9, 2014

Report of Foreign Bank and Financial Accounts

This is a reminder that the deadline to file Form 114 (formerly Form TDF 90-22.1) – Report of Foreign Bank and Financial Accounts (FBAR) is June 30th.  There is no extension of time granted for the filing of this form.  Please note there are important changes for 2014 relating to how this form is filed

Who does this apply to?  FBAR filing applies to individuals, trusts, estates, and other domestic entities (ex. corporations, partnerships) that have an interest in foreign financial accounts and meet the reporting threshold.  An interest in a foreign financial account includes signature authority on an account, title of an asset, or greater than 50% interest in an entity.

If you are an officer or an employee who has signature authority over your company’s foreign financial assets, you may have a filing requirement.

What is the reporting threshold?  If a US person holds a financial interest in or signature authority over at least one foreign financial account, and the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year, Form 114 must be filed.

What is reported?  You must report the maximum value of the financial accounts maintained by a financial institution physically located in a foreign country.

What are the penalties for not filing?  The penalties assessed can be up to $10,000 if non-willful, up to the greater of $100,000 or 50-percent of account balance(s), if willful; criminal penalties may also apply.

E-File: New for 2014, the IRS now requires you to e-file your FBAR.  If we are preparing your Form 114, we will send you an e-file authorization form to sign which authorizes us to release your FBAR form electronically.

Separate reporting requirements and thresholds apply to Form 8938 – Statement of Specified Foreign Financial Assets.  This form is filed in conjunction with your tax return.

Please click here for more information on the exact reporting requirements.

For those who have unreported foreign assets for prior years, the IRS still has its voluntary compliance measures in place.  If you have any questions, we welcome the opportunity to speak with you.