Posted in: Blog, Posted On: 02-06-2015, Posted By: stevenadmin

Under the Bank Secrecy Act, U.S. residents or a person in and doing business in the United States, including students, persons with a green card or work visa) must file a report with the U.S. Treasury if he or she has  a financial account in a foreign country with an aggregate value exceeding $10,000 at any time during the calendar year.  Willful failure to file an FBAR report can be punished under both civil and criminal law.

Filing the FBAR is a two-part reporting process.  First, Form 1040, Schedule B, Part III, instructs a taxpayer to indicate an interest in a financial account in a foreign country by checking “Yes” or “No” in the appropriate box.  Form 1040 then refers the taxpayer to Form 114, the FBAR, which provides that it should be used to report a financial interest in or authority over bank accounts, securities accounts, or other financial accounts in a foreign country.  The deadline for filing the FBAR for each calendar year is on or before June 30 of the following year.

As stated above penalties for failing to file the FBAR can be either be civil and or criminal.  Civil penalties can range from $500 (negligent violation) all the way up to $100,000 or 50% of the amount in the account whichever is higher (willful failure to file).  Criminal penalties for willful failure to file can be as high as $500,000 or 10 years imprisonment or both.

If you or someone you know has foreign assets, it is vital that they sit with a CPA or Tax Attorney to discuss their filing requirements.  The cost of not filing is too high.

Please call today to schedule a free consultation to see how we can help you with your tax and accounting needs Call Us or Email Us